Crypto

What is the Market Cap in Crypto?

Published

2 years ago

January 20, 2024

Comprehensive Analysis: Understanding Market Cap in the Crypto

The worth of a cryptocurrency is frequently determined using the term “market cap.” At its essence, the term is simpler even though it may appear complex. What does it signify, and why is it essential? Let’s analyze it.

Identifying Market Capitalization

Fundamentally, market capitalization gives an overview of an asset’s entire market value. The same formula applies whether evaluating a cryptocurrency or a company’s value on the stock market:

Market Cap is calculated as follows: Current Asset Price x Total Assets in Circulation

When it comes to cryptocurrencies, this refers to:

A cryptocurrency’s market capitalization is equal to its current price times its total circulating supply.

Let’s use a fictitious scenario to clarify.

The market capitalization of a cryptocurrency called “CryptoCoin” would be €10 multiplied by the number of coins in circulation (€10 x 1,000,000 = €10,000,000) if CryptoCoin is selling at €10.

This indicates that €10 million is CryptoCoin’s market capitalization.

What Makes Market Cap Important?

Stability Indicator: A coin with a larger market capitalization is likely more widely accepted and is therefore seen as more mature and stable.

Risk assessment: It is a tool used by investors and traders to evaluate the risk-to-reward ratio. Higher market capitalization cryptocurrencies are often thought to be less hazardous than lower capitalization ones.

Liquidity Indicator: Coins with a larger market capitalization generally have more liquidity, which facilitates buying and selling.

Trend Analysis: Tracking shifts in market capitalization over time might reveal information about probable price fluctuations and the state of the market as a whole.

Cryptocurrency Market Capitalization:

Although the fundamental calculation is simple, there are complications to comprehending market capitalization in cryptocurrency.

Comparing Circulating vs Total Supply: Not every token can be exchanged for another. Some may be reserved, closed, or not available just yet. Therefore, we typically take into account the market cap’s circulating supply rather than its overall supply.

Market Cap Dominance: As of January 10, 2024, the ratio of the market capitalization of Bitcoin to the total market capitalization of cryptocurrencies was less than 50%. This indicates that Bitcoin’s influence over the whole cryptocurrency market has declined recently.

Volume and Market Cap: It’s critical to take market cap and trading volume into account. insufficient trading volume and a large market cap may be signs of insufficient liquidity, which makes it more difficult to buy or sell without changing the price.

Sorting Cryptocurrencies using Market Capitalization

It’s common to hear phrases like “Large Cap,” “Mid Cap,” and “Small Cap” in the cryptocurrency world. Their market capitalization serves as the basis for these divisions:

Large-Cap: Digital assets with a market valuation of more than US$10 billion. For instance, USDC, Tether (USDT), Ethereum (ETH), and Bitcoin (BTC). They are considered to be more trustworthy.

Mid-Cap: Digital assets with a market capitalization ranging from US$1 billion to US$10 billion. Litecoin (LTC), Cardano (ADA), Dogecoin (DOGE), and Polygon (MATIC) are a few examples. Large caps are less risky than these, but they may have greater upside potential.

Small-Cap: Digital assets having a market value of less than US$1 billion. Immutable X (IMX), Axie Infinity (AXS), and Aave (AAVE) are a few examples. They offer a chance for great returns but can also be more risky and erratic.

The Risks of Using Market Cap Exclusively:

Although market capitalization is a significant indicator, it can be deceptive to base investment decisions only on it. This is the reason why:

Market Volatility: The values and market capitalizations of cryptocurrencies can fluctuate quickly.

Price manipulation: Cryptos with smaller market capitalizations may be more vulnerable to it.

Neglecting Other Crucial Elements: Concentrating only on market capitalization may cause one to ignore other essential elements such as the project’s technological solutions, adoption rate, and level of competition.

Conclusion:

For traders, investors, and cryptocurrency fans, market capitalization is an essential instrument. Instead of serving as the only criterion for making decisions, it needs to be used in conjunction with other research instruments. Make sure you have a thorough understanding of the cryptocurrency field, bearing in mind that market capitalization is subject to sudden fluctuations due to the volatile nature of cryptocurrencies. It is imperative, as always, to conduct thorough research and confer with financial experts before to making any investment decisions.

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Crypto

Cryptocurrency Stocks To Consider

Published

10 hours ago

February 1, 2026

Press Room

Galaxy Digital, Bitfarms, and HIVE Digital Technologies are the three Cryptocurrency stocks to watch today, according to MarketBeat’s stock screener tool. Cryptocurrency stocks are shares of publicly traded companies whose business models or revenues are closely tied to cryptocurrencies or blockcha

Crypto

Regulation Turns Bullish: US Positioned as Global Hub for Crypto, DeFi, Derivatives

Published

22 hours ago

February 1, 2026

Press Room

U.S. crypto regulation is entering a decisive new chapter as federal leaders move to align oversight, clarify rules, and cement American dominance in digital asset markets through coordinated action across agencies and existing regulatory authority.

Crypto

Prediction: This Ultimate Cryptocurrency’s Price Will 10X in 10 Years if This Happens | The Motley Fool

Published

1 day ago

January 31, 2026

Press Room

A forecast annualized gain of 26% is exciting, but it’s a much lower rate of return than the last decade showed.

Investing in unproven technologies is a risky endeavor. But if investors have done their homework and have conviction, it certainly makes sense to take a position. What was a risky bet in the early days over time starts to look more like a safer opportunity. That’s what I think has occurred with a top digital asset, even though there is still tremendous upside.

In the past decade, this cryptocurrency‘s price skyrocketed almost 22,000% (as of Jan. 26). I predict that it could rise tenfold over the next 10 years if this happens.

Image source: Getty Images.

Fulfilling the digital gold narrative

On the morning of Jan. 26, Bitcoin‘s (BTC 6.51%) market cap was $1.7 trillion. I think it’s very realistic that this figure could increase tenfold, driving the popular digital asset’s market cap to $17 trillion in early 2036. This would result in a much lower gain than the 71% annualized return we’ve been enamored with over the past decade. And it would imply a Bitcoin price of about $880,000 in 2036.

The basis of this prediction is simple and straightforward. Gold is the best asset to compare to Bitcoin. Gold has been on a fantastic run, with its price soaring 99% in the past 24 months (as of Jan. 26). The value of all above-ground gold is estimated to be $35 trillion. It’s reasonable, in my view, to see Bitcoin reach half the value in 10 years that the precious metal is today.

The only thing that needs to happen is that more individuals, companies, asset managers, and governments start to view Bitcoin as a better store of value and portfolio holding. This sounds easy enough, but gold’s impressive recent performance shows that Bitcoin still has a lot of work to do to win over more people around the world, especially those thinking about geopolitical uncertainty and burgeoning sovereign debt.

But I remain bullish. Cathie Wood-led Ark Invest sees Bitcoin fulfilling the digital gold narrative as the most important variable in its outlook.

Today’s Change

(-6.51%) $-5475.86

Current Price

$78647.00

Key Data Points

Market Cap

$1.6T

Day’s Range

$77082.00 – $84142.00

52wk Range

$74604.47 – $126079.89

Volume

78B

Set up for success in an increasingly digital world

Gold’s biggest advantage is that it’s been a top store of value for thousands of years. That longevity and safe-haven status is important for many market participants, particularly those in charge of huge sums of capital.

Bitcoin is superior in many ways, however. It’s more portable, verifiable, divisible, and resistant to censorship. Bitcoin is also scarcer, with an absolute cap of 21 million units to its supply.

And the fact that the cryptocurrency is purely digital means that it’s best positioned to thrive in a world that is only going to become more impacted by things related to technology, artificial intelligence, and the internet.