Cryptocurrency Total Market Capitalization is the simplest method for determining the value of digital assets in the cryptocurrency market. Calculating the marketplace is very easy, multiply the current value of cryptocurrency by the total number of coins in circulation.
Let’s understand by example if the NCOG coin is valued at $100 in the future and supply will be 25 million so multiplying both the numbers we will get the result which is $2.5 billion.
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Cryptocurrency Total Market Capitalization
The total market cap includes market data from various cryptocurrencies, such as Bitcoin, Ethereum, and XRP, to offer a more comprehensive, up-to-date view of the state of the crypto asset industry.
Monitoring the total supply of altcoins is important. For example, a maximum limit of 21 million coins in circulation is held by Bitcoin. On the other hand, some altcoins, like ETH, have a much larger total supply, with 1 billion coins available.
Calculation of market capitalization of cryptocurrency
Calculation in the crypto market is calculated by multiplying the cryptocurrency’s current rate by the total number of assets in circulation.
Market cap = Existing price of cryptocurrency X Supply in circulation
In exchange, one can track every cryptocurrency and volume related to it. Before investing in cryptocurrency, it’s necessary to check all its relevant data to gain information on profits and losses.
The best website to track all the necessary data is Coinmarketcap so analysing 24-hour trading volume data across different exchanges and then taking a decision is advisable.
A better gauge of the general worth of a cryptocurrency in contrast to its price is the market capitalization—market cap. The factors that set coin market cap apart from simple coin value include the fact that market cap sums up the value of all the circulating coins to provide a clearer picture of the scale of the cryptocurrency.
For instance, a coin with billions of coins and that is cheap in the market will have a higher market cap than a coin that is expensive but few in the market.
Since the price may not accurately tell the actual standing or dominance of one cryptocurrency over the other in the market, an easier way of doing this is by categorizing them by market capitalization.
However, if there are fewer coins available in the market, a coin that might cost $50 can be worth more compared to the one that costs $500.
Market cap signifies that the market cap illustrates growth and stability, whereby programs with higher market cap are more stable as compared to those with smaller market cap, which are risky but may have high returns.
Conclusion
Market capitalization is considered one of the most basic measures used in cryptocurrency, assisting in the understanding of which cryptocurrencies are more popular among users and which show greater growth potential.
However, a higher market capitalization is typically indicative of a more established and potentially long-term, stable, and reliable cryptocurrency, traders cannot rely solely on this factor as they must take into account other aspects such as trading volume, community support, and technical specifications.