Moreover, it helps analysts and investors assess cryptocurrencies’ relative importance and size. Crypto market capitalization or «crypto market cap» for short is a widely used metric that is commonly used to compare the relative size of different cryptocurrencies. On CoinCodex, market cap is the default metric by which we rank cryptocurrencies on our frontpage. We also track the total cryptocurrency market cap by adding together the market cap of all the cryptocurrencies listed on CoinCodex. The total market cap provides an estimate on whether the cryptocurrency market as a whole how to add bitcoin to wallet is growing or declining. In the crypto market, understanding the concept of market capitalization can help investors make better-informed decisions by comparing market caps across large, mid, and small-cap coins.

Cryptocurrency Prices

• Two coins with similar market caps can have wildly different teams, roadmaps, and risks.
• There’s a lot of debate about how much weight should be placed on the size of the cryptocurrency market.
• These coins are typically seen as higher-risk investments due to their low liquidity, high volatility, and potential for manipulation.

Let’s break down , how it’s calculated, and why it plays a crucial role in market ranking. Cryptocurrencies like Bitcoin and Ethereum dominate despite market turbulence, indicating their influence and resilience. Market capitalization is not just a vanity metric; it also impacts investment decisions, index composition, and portfolio allocation. By emphasizing the utility of market cap, it facilitates the identification of trends and opportunities by helping traders navigate the complex and dynamic world of digital assets. Crypto prices and market data have always been at the core of our product – it’s what we do best. We provide unbiased cryptocurrency data for the community, whether to help you make an investment decision or check the value of your crypto assets.

Factors That Can Distort Market Cap Figures

Small-cap cryptocurrencies have a market cap of lower than $1 billion, and are deemed to be the riskiest  investments. Mid-cap cryptocurrencies have a market cap of between $1 billion and $10 billion. You can use market cap to compare and rank coins within the crypto market.

How to calculate market capitalization?

But they also offer more growth potential—small buys can move the price fast. The fully diluted market cap in crypto means that all coins or tokens have been released into the market by the creators of the project. Since there is no more supply of the token to be released, it becomes easy for investors to make a buying or selling decision based on the price performance of the token. Those who take minimal risk with their investments often choose large-cap cryptocurrencies because they provide stability and long-term security. A balanced crypto investment plan combines the benefits of mid-cap crypto and large-cap assets to generate moderate growth potential with safety precautions in place. A “crypto market cap” indicates the overall market value of any given crypto.

Since the circulating supply stays mostly constant day-to-day, price changes drive short-term cap moves. News events like ETF approvals, regulatory decisions, or protocol upgrades cause steep reactions. While market cap and price may seem like interchangeable terms, they are very different. Still, a trader should know that the circulating supply of a coin—which is used in this calculation—is different from the total supply. Now for real-time trading opportunities that enable you to track modern market developments. Investors use market cap to structure their portfolios based on risk tolerance and market conditions.

Measuring Market Scale and Stability

Similar to stock prices, it is influenced heavily by supply and demand dynamics, trading activity, and market sentiment. The market capitalization of a cryptocurrency is calculated by multiplying the token price by the number of coins it has in circulation to determine its value. You can make smarter investment decisions based on cryptocurrency market capitalization, a simple, straightforward method of determining a currency’s size. CoinMarketCap was the first to introduce the concept of ranking crypto assets based on a coin’s market capitalization.

It is calculated by multiplying the circulating supply of coins or tokens by the current market price of each individual coin or token. Large-cap cryptocurrencies are those with a market cap over $10 billion. Some of the most well-known cryptocurrencies, like Bitcoin and Ethereum, fall into this category. Due to their size and liquidity, large-cap cryptocurrencies are often binance vs coinbase seen as safer investments, but they might also offer lower growth potential compared to smaller coins.

The price of any cryptocurrency fluctuates frequently due to various factors, and these price fluctuations directly affect the market cap. Cryptocurrency prices are driven by market demand, news, regulatory changes, investor sentiment, and overall market conditions. When the demand for a particular cryptocurrency increases, the price rises, which leads to an increase in market cap. Conversely, if the demand decreases, the price falls, and so does the market cap.

• The main limitation of market capitalization is that it doesn’t account for the rate at which the tokens are expected to increase in value.
• Bitcoin (BTC) fell by 0.4% at the time of writing, meaning that it’s mostly unchanged, currently trading at $112,381.
• Cryptocurrency investing can feel like speed-running a finance degree while juggling the potential macroeconomic fallout of a G7 policy shift.
• In some instances, low market cap tokens may exponentially rise in value over time as they build their community and gradually grow their valuation.
• Proof-of-Work coins use mining, while Proof-of-Stake coins use staking to achieve consensus about the state of the ledger.

While market cap gives traders an idea of the size of an asset within the market, trading volume provides information about the level of buying and selling activity. High trading volume suggests there is a lot of interest and activity surrounding a particular asset, while low trading volume may indicate a lack of interest or liquidity. In the cryptocurrency space, market capitalisation (market cap for short) plays a crucial role for traders understanding the overall value and significance of a particular digital asset. In this article, we explore what market cap is, why crypto traders think it is important, how it relates to crypto asset valuation, and how to calculate it. Altcoins are every other cryptocurrency created after Bitcoin, and they can be coins or tokens. Coins are native currencies to the blockchain, while tokens are cryptos built on the blockchain.

Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

In Bitcoin, miners use their computer hardware to solve resource-intensive mathematical problems. The miner that reaches the correct solution first gets to add the next block to the Bitcoin blockchain, and receives a BTC reward in return. If you value a highly secure and decentralized network above all, Bitcoin is probably your best bet. This is because the Bitcoin network consists of thousands of nodes spread geographically and is secured by a massive amount of computing power. On the other hand, if you require transactions to be very fast and cheap, Bitcoin is probably not the best choice due to the relative inefficiency of its Proof-of-Work design.

Over time, Bitcoin has evolved into both a medium of exchange and a store of value (“digital gold”), particularly in non-fungible token nft economies with unstable currencies. As of early 2025, the total global crypto market cap stands at $3.71 trillion. To calculate a coin’s market cap, you multiply the number of coins that have been issued by the price of a single coin. For example, on July 21, 2021, the supply of Ether was 116.8 million coins. Multiply that by the coin price of 1,588.61 euros, and you arrive at the Ethereum market cap of 185.5 billion euros.

As well as a potentially significant volume of privately issued or owned coins held in lock up, there are also coins awaiting release in an ICO. Some coins are lost over time, and others may simply remain stagnant in anonymous wallets. The metrics are derived from the performance of leading altcoins compared to Bitcoin over the past three months. The indicator is in “altseason territory” and is at its highest level since December, said Coin Bureau founder Nic Puckrin. CoinRank Exclusive brings together primary sources from various fields to provide readers with the most timely and in-depth analysis and coverage. Whether it’s blockchain, cryptocurrency, finance, or technology industries, readers can access the most exclusive and comprehensive knowledge.