What is Market Capitalization in Crypto?
Market Capitalization (Or Market Cap) In Crypto Is A Metric Used To Determine The Total Value Of A Cryptocurrency In The Market
✅ How It's Calculated:
text{Market Cap} = text{Current Price of One Coin} times
text{Total Circulating Supply}
🔍 Example:
If a cryptocurrency is trading at $100 and has 10 million coins in circulation:
100 \times 10,000,000 = 1,000,000,000
🧠 Why It Matters:
Size Indicator: Helps compare the relative size of different cryptocurrencies
Risk Level:
1)Large-cap (e.g., Bitcoin, Ethereum): Generally more stable.
2)Mid-cap: More potential growth but higher risk.
3(Small-cap: High risk, high reward potential.
4)Investor Insight: A coin with a high market cap is often seen as more established or trusted.
⚠️ Limitations:
1)Doesn’t account for token liquidity or price manipulation.
2)A project can have a high market cap but still be vulnerable or overhyped if the supply is tightly held.