What is market capitalization?

This is the total value of all coins or tokens of a project in circulation.

Calculated using the formula: Capitalization = Current price × Total number of coins.

Why is this necessary?

Capitalization helps to understand how large and stable a project is. But it's important to look not only at the numbers, but also at the context.

How to assess capitalization?

1. Comparison with analogs

Look at projects in the same niche. If a project's capitalization is significantly lower, it may indicate undervaluation or weakness.

2. Tokenomics

Consider how many tokens are already in circulation, and how many are locked or reserved. If a large portion of tokens has not been issued, the capitalization may be artificially low.

3. Market cycles

Capitalization can change sharply depending on the market phase. In a bull trend, even weak projects grow, while in a bear trend, they fall harder.

Examples

— Project A

Capitalization 1 billion, trading volume 1 billion, trading volume 10 million.

— Project B

Capitalization 500 million, trading volume 500 million, trading volume 50 million.

Project B will be more attractive, as its tokens are actively traded.