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HOW TO MEASURE THE MARKET CAP OF CRYPTOCURRENCYOn the heels of a meteoric bull run, the crypto markets have now a $500 billion market cap, an all-time high. That’s a big number. But what is market capitalization, why does it matter, and just how could it help evaluate a coin? We’ll know the reason behind now.
Market capitalization is a well-known metric for traditional securities, but has unique implications in crypto. Market capitalization is a measure of the value of a security. This works by increasing the amount of outstanding stock shares by the present stock price. However, crypto is calculated by circulating supply of tokens multiplied by present value. As an example, a coin that has 100 tokens and yo trade it for $10, you multiply it and the result would be $1000 which is the market capitalisation. There are roughly 18 million bitcoins in existence, and the cost is around $9700 at time of writing. Bitcoin’s market capitalizations, consequently, is roughly $174.5 billion.
Traditionally, bonds and stocks have been analyzed via financial metrics and ratios. Measures such as price-to-earnings ratio, earnings per share, the present ratio, earnings growth, and so on are used to examine stocks. You may use market capitalizations since it gives steps regarding how to learn on evaluating cryptocurrency mainly because crypto teams doesn’t publish financial statements always. Bitcoin is sitting at around $174 billion. The top five on the list includes Ethereum at $23 billion, Litecoin $5.83 billion, Bitcoin Cash $5.42 billion and lastly is XPR $13.55 billion.