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EVALUATE 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. And that number is simply too big. But wait, how can a coin be calculated and checked through the aid of market capitalisation? We will break that down today.
Market capitalization is a well-known metric for conventional securities, but has unique implications in crypto. Security would be measured and checked by the usage of market capitalisation. This works by increasing the amount of outstanding stock shares by the current stock price. In crypto, it’s defined as the circulating supply of tokens multiplied by current price. For instance, a coin which has 100 tokens and yo trade it for $10, you multiply it and the result will be $1000 which is the market cap. There are approximately 18 million bitcoins available, and the price is around $9700 at time of writing. To sum it up, Bitcoin’s market cap is around $174.5 billion.
Usually, ratios and financial metrics are utilized to measure the bonds and stocks. To learn the value of stocks, there are tons of things to check like price-to-earnings ratio, earnings per share, the current ratio, earnings growth, and so on. You could use market cap since it gives steps regarding how to learn on evaluating cryptocurrency mainly because crypto teams does not publish financial statements always. Now, bitcoin is approximately $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.