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Tips On How To MEASURE THE MARKET capitalisation OF CRYPTOCURRENCYOn the heels of a meteoric bull run, the crypto markets now have a $500 billion market cap, an all-time high. That’s a big number. But what is market capitalisation, why does it matter, and just how can it help evaluate a coin? We’ll break that down today.
With regards to traditional securities it is the market capitalization that examines everything and it has an involvement in crypto. Market cap is a measure of the value of a security. It normally contains multiplying the amount of excellent stock shares by the current stock price. However, crypto is calculated by circulating supply of tokens increased by current price. If a coin has 100 tokens outstanding and is trading for $10 a coin, it has a market capitalizations of $1000. There are approximately 17 million bitcoins available, and the cost is approximately $9300 at time of writing. Bitcoin’s market capitalisation, therefore, is around $158 billion.
Traditionally, stocks and bonds have already been analyzed via financial metrics and ratios. 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. Nonetheless, crypto teams do not publish financial statements, what metrics that do exist are all the more important Market cap provides a quick and easy check on how valuable a cryptocurrency is. Today, bitcoin is about $159 billion. Ethereum is the second-biggest, at $67 billion. Ripple ($33 billion, Bitcoin Cash ($25 billion), and EOS ($17 billion) round out the top five.