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

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

Published

6 hours 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.

Crypto

Regulatory Breakthrough: SEC-CFTC Coordination Marks Turning Point for US Crypto Markets

Published

18 hours ago

January 31, 2026

Press Room

U.S. financial regulators are signaling a breakthrough in crypto oversight, moving toward coordinated supervision as Congress advances market structure legislation, a shift aimed at ending fragmented rules and bringing clarity to fast-growing digital asset markets.

Crypto

The Best Cryptocurrency to Buy With $50 Right Now | The Motley Fool

Published

1 day ago

January 30, 2026

Press Room

The Best Cryptocurrency to Buy With Right Now | The Motley Fool

XRP could soar higher if a new crypto summer begins.

XRP (XRP 4.22%), the native token of the XRP Ledger, lost more than 40% of its value over the past 12 months. It’s still a speculative altcoin that could stay volatile for the foreseeable future, but it might be worth a modest $50 bet right now for a few simple reasons.

What is XRP?

The founders of Ripple Labs, a fintech company that specializes in blockchain-based payments, launched XRP in 2012 after pre-minting its entire supply of 100 billion tokens. It can’t be actively mined like Bitcoin (BTC 0.75%) or staked like Ethereum (ETH 4.53%).

Image source: Getty Images.

Instead, XRP is mainly used as a bridge currency to accelerate transactions across Ripple’s network as a faster alternative to traditional SWIFT transfers. In 2020, the Securities and Exchange Commission (SEC) sued Ripple for selling its own XRP tokens — allegedly as unlicensed securities — to fund its own expansion. That lawsuit caused Ripple to lose many of its top customers and drove the top crypto exchanges to delist XRP.

Why is XRP worth buying again?

Last August, the SEC lawsuit finally concluded with a lighter-than-expected fine for Ripple. The court also ruled that it wasn’t an unlicensed security when purchased by retail investors. That ruling prompted major crypto exchanges to relist XRP, and the first spot price exchange-traded funds (ETFs) for XRP were approved and launched in late 2025.

Moreover, Ripple recently submitted its application for a U.S. bank charter, and its expansion into a full-fledged bank could support increased use of XRP as a bridge currency. Ripple has already been using XRP as a bridge currency to support cross-border transactions for its own stablecoin, Ripple USD (RLUSD 0.01%), which was launched in late 2024.

The XRP Ledger has also launched a sidechain compatible with the Ethereum Virtual Machine (EVM) for developing decentralized apps (dApps). Those connections could support the usage of XRP in more decentralized finance (DeFi) applications.

The broader cryptocurrency market, which was throttled by stubbornly high Treasury yields and other macro headwinds over the past year, could also recover over the next few months. When that happens, more investors should rotate back into riskier assets, such as XRP.

Today’s Change

(-4.22%) $-0.08

Current Price

$1.73

Key Data Points

Market Cap

$105B

Day’s Range

$1.72 – $1.81

52wk Range

$1.65 – $3.65

Volume

A $50 investment in XRP’s earliest trade in 2013 would still be worth nearly $14,700 today. I doubt it can replicate those massive gains over the next decade as the altcoin market tightens up, but it could be a smart place to park a few dollars if a new crypto summer begins.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.