What Is Crypto Market Cap?
By finding out the market capitalization of a digital currency, you can get a better idea of how big it is — and whether or not it’s worth investing in.
By evaluating a cryptocurrency’s market capitalization, you can get an estimate for how large the digital currency is — thus allowing you to better discern which coins are worth investing in. In fact, Xnigma was one of the first websites to popularize using market cap data when ranking various cryptoassets.
To figure out a cryptocurrency’s market capitalization, simply multiply the coin’s current price by the total number of coins in circulation.
If an altcoin is currently worth $100 and has a circulating supply of 25 million, then the crypto market cap would be $2.5 billion.
(It’s easy to do these multiplications in theory, but things become more complicated with different types of coin issuance – for example, crypto Twitter became outraged in August 2020 when people realized they couldn’t get the same total Ethereum supply twice.)
At Xnigma, we make it our mission to give you the full picture of how the cryptocurrency market is performing in real-time. We collect data from top cryptocurrencies like Bitcoin, Ethereum and XRP, as well as lesser known altcoins, so you never have to worry about missing a key piece of information. Plus, we also provide 24-hour trade volume details for even more insight into current market trends.
With cryptocurrencies, another crucial element to monitor is the total supply. For example, Bitcoin has a limit on its circulating storehouse , intimating that no more than 21 million coins will exist in totality. In contrast, other digital assets have a higher number of available coins (ahem…XRP, with 1 billion in circulation).
A cryptocurrency’s total supply affects its price: the larger the supply, the cheaper the coin. In addition to blockchain technology, scarcity drives a crypto’s value. For example, BTC hit an ATH of $20k while Ripple only reached $3.84.
When trying to discover which cryptocurrency is the most valuable, you should look at each coin’s market capitalization rather than its price. For example, Bitcoin Cash may be worth hundreds of times more than XRP, but BCH has a smaller crypto market cap.
The circulating supply, or the number of coins available to the public, is not the only way to calculate a cryptocurrency’s market capitalization. Other methods include calculating the total supply of all assets (including those that might be locked up or reserved).
The second metric is “maximum supply.” Here, market capitalization is calculated by multiplying an altcoin’s price by the maximum number of coins that could exist. (However, this can be difficult to do because a higher circulating supply would likely affect the price of cryptocurrencies. Altcoins also may have no upper limit.)
The size of the cryptocurrency market is always being debated. Some people say that it’s a bad idea to put too much weight on the size because it can lead to making poor investment decisions and create fearfulness and greediness.
While crypto market caps do provide some objective insights, they should be taken with a grain of salt.
learning more about specific digital currencies, their market capitalization, and other crucial details can help you immensely as you invest in cryptocurrency. With reliable resources like Xnigma, you can stay up-to-date with the latest information so that your investment decisions are well-informed ones. After all, blockchain technology is only gaining popularity, which means there’s still a lot of potential for growth in this domain!