If you’re wondering what the market cap in crypto is, this guide will solve your dilemma. We’ll start by explaining what does market cap mean in crypto and how it’s calculated. After that, we’ll talk about its importance for investors. And finally, we’ll list the most popular cryptocurrencies by market cap.
Here’s all you need to know about crypto market capitalization.
Learn in This Article
What Is the Market Cap in Crypto?
What is the market cap in crypto? Cryptocurrency market capitalization is a term that refers to the value of a cryptocurrency. In other words, it represents how much a specific digital currency is worth in the crypto market.
The market cap number also shows how many investors a certain currency has. A higher market cap equals more investors.
Many factors will affect the size of the market cap of a particular cryptocurrency, such as its price fluctuations or its burning of tokens.
How Is the Market Cap Calculated?
To calculate the market cap of a digital currency, you’ll have to multiply its total supply or circulating supply with its current price on the market.
For example, if a cryptocurrency costs $5.00 and has a total supply of 10,000,000, its market cap will be $50,000,000. We got this number by multiplying its total supply (10,000,000) by its current price ($5.00).
Why Is the Market Cap Important?
Market cap is important because it shows the value of a particular cryptocurrency and its potential for growth. This is why many investors will compare market cap trends of different altcoins to see how well they perform on the market.
For example, a smaller market cap suggests higher investment risk. Conversely, coins with larger market caps have higher liquidity. This means that they have more active traders, which makes them safer to invest.
The market cap of digital currencies can be classified into three groups — large-cap, mid-cap, and small-cap cryptocurrencies.
Large-cap cryptocurrencies have a market capitalization of over $10 billion. These currencies have greater liquidity, higher trading volume, and fewer price fluctuations. This is why they are considered lower-risk investments.
These are usually popular crypto projects with strong communities supporting them. Examples of large-cap cryptocurrencies are Bitcoin, Ethereum, and Tether.
Mid-cap cryptocurrencies are coins or tokens that have a market cap between $1 billion and $10 billion. These coins usually have great growth potential. However, investors consider them risky as their price often fluctuates. Examples of mid-cap cryptocurrencies include Litecoin, Dogecoin, and Cardano.
Small-cap cryptocurrencies’ market cap stands below $1 billion. Since these are relatively unknown or new cryptocurrencies, they are more prone to price fluctuations. This makes them more risky for investment. Examples of low-cap cryptocurrencies are Bitcoin ETF Token, Meme Kombat, and eTukTuk.
To make an informed decision, investors should compare the market caps of different cryptocurrencies. This can be done through platforms that are intended for this purpose, such as MarketCap Of.
They should also make a cryptocurrency market cap vs stock market cap distinction. Why? Since stocks are regulated assets, which means they are less variable.
What Is the Total Market Cap?
The term crypto total market cap refers to the overall market capitalization and volume of cryptocurrencies on a global scale. There are currently 11,172 cryptocurrencies, and their total market cap stands at $4,000,000,000,000.
At the same time, the total market cap of all DeFi coins stands at $70,000,000,000, while the market cap of all stablecoins and altcoins amounts to $100,000,000,000 and $2,000,000,000,000, respectively.
What Are the Most Popular Cryptocurrencies by Market Cap?
The most popular cryptocurrencies, i.e., digital currencies with the largest market cap are:
- Bitcoin (BTC) — $738,043,263,268
- Ethereum (ETH) — $245,339,821,456
- Tether (USDT) — $89,292,711,379
- BNB (BNB) — $34,633,935,102
- Ripple (XRP) — $32,534,928,372
Conclusion
Understanding the value of crypto by market cap standards will not only help you make an informed decision about your future investments. It will also show you coins that are currently dominating the crypto market.
On that note, altcoins with market caps over $10 billion are less prone to price changes, which makes them safer to invest in. Coins with market caps between $1 billion and $10 billion usually show great growth potential. However, they are also more prone to price fluctuations.
And finally, market cap in crypto with a value below $1 billion indicates greatest growth potential. This makes them the most risky investment option, as they are highly volatile.