The total crypto market cap shows the overall state of the crypto economy. When the total market cap grows, interest in crypto usually increases. Market cap gives you a more thorough picture (yet still an incomplete one–-but we will address this again later on in the article). A coin priced at $0.01 with 100 billion coins in circulation has a market cap of $1 billion. Meanwhile, a coin priced at $500 with only 1,000 coins in circulation has a market cap of just $500,000. Always check the market cap—not cryptocurrency exchange jobs just the price—when comparing cryptocurrencies.

What is Bitcoin (BTC)?

Use tools like CryptoMiso or Santiment to check development and sentiment metrics. Market cap gives you a quick, clear picture of a crypto’s current standing. It’s a metric that every smart investor should know and use, but don’t treat it as gospel. Pair market cap with trading volume, supply stats, and price charts to build your understanding. The process of making investment choices depends heavily on a proper understanding of market trends alongside crypto price movements. The total market capitalization allows investors to through its measurement of the total market value.

Micro-cap cryptocurrencies are those with a market cap under $100 million. Investors in micro-cap coins should be prepared for extreme price swings and the potential for large losses. However, these coins can also present enormous upside if they succeed in gaining mainstream adoption or recognition. Market cap doesn’t reflect code quality, developer activity, or community strength. Two coins with similar market caps can have wildly different teams, roadmaps, and risks.

Risk & Volatility Profile

Large-cap cryptocurrencies are more stable, but smaller market caps have more growth potential. Generally speaking, the market cap also influences investor sentiment and liquidity. If a coin lacks a sizable market cap, day-to-day price movements can be more volatile, making it difficult to buy or sell large amounts without affecting the market.

• This way, we can determine an average price that reflects cryptocurrency market conditions as accurately as possible.
• In reality, market cap is a derived value based on price and supply, not actual capital inflow.
• A coin with 100 billion tokens will need a $100B market cap to reach $1.
• That price increase raises the market cap, even if real interest is low.
• The market cap of every cryptocurrency was affected by this event, and it was not in a good way.

How Does Market Cap Influence Crypto Investment Strategies?

Crypto.com may not offer certain products, features and/or services on the Crypto.com App in certain jurisdictions due to potential or actual regulatory restrictions. There are several common misconceptions about market cap in the crypto industry. If you would like to advertise with CoinMarketCap or are interested in our product offerings for companies, drop us an e-mail at For editorial partnerships on our blog, write to us how to open aws free tier account solved 2022 login solution at Cryptocurrencies such as Bitcoin feature an algorithm that adjusts the mining difficulty depending on how much computing power is being used to mine it.

Looking at the market cap, you can understand where a crypto actually stands in the crowded market. Coins with a high market cap may attract institutional investors, reinforcing trust and legitimacy. Assets like and Ethereum dominate due to their strong market capitalization, making them safer choices for long-term holdings.

• In essence, it is a snapshot of the coin’s worth as perceived by the market.
• These include newer altcoins, meme coins, and niche blockchain projects.
• It’s important to note that despite the volatility, Bitcoin’s price has consistently gone up over time.
• One metric that is important for comparing cryptocurrency exchanges is trading volume.
• JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co.

Company

Now, let’s provide a simple theoretical example of how the value of stablecoins actually stays stable. The cryptocurrencies listed here are used as examples to illustrate the point that the best cryptocurrency depends on your specific requirements and use case. CoinCodex tracks crypto exchanges and thousands of trading pairs to make sure that our data is as reliable as possible. The two major categories of cryptocurrencies are Proof-of-Work and Proof-of-Stake. Proof-of-Work coins use mining, while Proof-of-Stake coins use staking to achieve consensus about the state of the ledger.

Mid-cap cryptos hold a middle ground that combines maturity with the potential to still grow. They’ll usually have a market cap of between a few hundred million and a few billion dollars. Cash inflow, on the other hand, refers to the actual money entering the ecosystem to buy tokens. It reflects investor confidence and real demand, which is not captured by market cap alone. Market cap helps determine whether a cryptocurrency has the volume and activity to support such movement.

For long-term investors, larger projects with steady volume and adoption offer more stability. Make sure you’re not looking at a fully diluted market cap to avoid overvalued coins with hidden risks. Despite this, it’s important to remember that market cap is only a starting point and does not provide exhaustive information about a cryptocurrency.

In those situations, our Dexscan product lists them automatically by taking on-chain data for newly created smart contracts. We do not cover every chain, but at the time of writing we track the top 70 crypto chains, which means that we list more than 97% of all tokens. Successful investment decisions demand an assessment of market cap, trading volume, on-chain activity, and project fundamentals data. Tracking total market capitalization helps identify bull and bear market cycles. Small-cap crypto often outperforms in Bull markets, while large-cap crypto holds value better during downturns, shaping investment strategies.

Market cap means the total value of a cryptocurrency, found by multiplying the coin’s price by the number of coins in circulation. A smart contract enables multiple scripts to engage with each other using clearly defined rules, to execute on tasks which can become a coded form of a contract. They have revolutionized the digital asset space because they have enabled decentralized exchanges, decentralized finance, ICOs, IDOs and much more. A huge proportion of the value created and stored in cryptocurrency is enabled by smart contracts. Fully diluted market cap considers the total value of a cryptocurrency if all possible coins were in circulation — including coins that have not yet been mined or distributed. Cryptocurrency market cap is just one factor you should be considering when analyzing the risk and growth potential of a project.

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However, they can also present opportunities for high returns if the projects gain traction. For investors who are trading frequently or managing larger amounts of money, liquidity is essential. The total amount of assets traded in a given timeframe, sometimes expressed as the fiat value of the amount. Cryptocurrency privacy is a fundamental requirement for the evolution of Web3. Dispelling these misconceptions is the first step toward understanding the true nature, importance, and future of privacy on the blockchain.

Cryptos can move between categories when their market price and the amount of coins in circulation changes causing changes to the size of their market cap. Crypto market cap, short for cryptocurrency market capitalization, indicates the overall value of all coins that have been mined. Market cap plays a significant role in shaping investment decisions in the cryptocurrency market. Investors often utilize market cap to gauge the risk-reward balance that different cryptocurrencies offer, influencing the diversification of cryptocurrencies listed their portfolios. On the other hand, cryptocurrencies with smaller market caps could present more lucrative growth opportunities. However, they may also carry higher risks as they are less established, and their prices can be more susceptible to market volatility.

Alternatively, an increase in circulating supply can also lead viscometer baths thermocap plus to an increase in market cap. However, an increase in supply also tends to lead to a lower price per unit, and the two cancel each other out to a large extent. In practice, an increase in price per unit is the main way in which a cryptocurrency’s market cap grows.