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CRYPTOCURRENCY MARKET CAP EXPLAINEDOn the heels of a meteoric bull run, the crypto markets have now a $500 billion market cap, an all-time high. That’s a huge number. But what is market capitalisation, why does it matter, and just how can it help evaluate a coin? We’ll break that down now.
With regards to traditional securities it is the market capitalization that examines everything and it has an involvement in crypto. Market capitalisation is a measure of the value of a security. It usually consists of multiplying the amount of excellent stock shares by the present stock price. In crypto, it’s defined as the circulating supply of tokens multiplied by present price. If a coin has 100 tokens outstanding and is trading for $10 a coin, it has a market cap of $1000. There are roughly 18 million bitcoins in existence, and the cost is around $9700 at time of writing. In summary, Bitcoin’s market cap is approximately $174.5 billion.
Usually, ratios and financial metrics are used to measure the stocks and bonds. To know the value of stocks, there are plenty of things to check like price-to-earnings ratio, earnings per share, the present ratio, earnings growth, and so on. Having said that, crypto teams don’t publish financial statements, what metrics that do exist are all the more important Market cap provides a quick and easy check on how valuable a cryptocurrency is. Now, bitcoin is approximately $174 billion. Ethereum is the second-biggest, at $23 billion. Litecoin ($5.83 billion, Bitcoin Cash ($5.42 billion), and XPR($13.27 billion) round out the top 5.