Mid Level Reading
13 Aug, 2023

Large Cap

Large cap or big cap projects/organizations refer to well-established entities with a market capitalization of $10 billion or more.

What is Large Cap?

In the world of cryptocurrencies, large cap tokens refer to cryptocurrencies that have a market capitalization of $10 billion or more.

The market capitalization of a token is calculated by multiplying the price of the currency by its circulating supply.

Large Cap vs Small Cap

Crypto tokens can be classified into three categories

  1. Large cap token belongs to a well-established and popular project, typically ranking in the top 25. These projects have a long-standing history, a strong community, and the ability to handle adverse events.
  2. Mid cap projects have a market capitalization between $3 billion and $10 billion. They generally offer higher growth potential compared to large cap projects but can be more volatile.
  3. Small cap projects have a market capitalization ranging from $300 million to $2 billion. They have greater growth potential but are more sensitive to macroeconomic shifts.

Why Do Large Cap Crypto Tokens Attract Investors?

Large cap crypto tokens attract investors for several reasons:

  1. Vast business model: Large cap tokens are associated with well-established projects that have a comprehensive business model. This promotes consistent performance and makes them less sensitive to minor news and events, resulting in lower volatility.
  2. Staking rewards: Large cap tokens often offer staking rewards, allowing investors to earn interest income in addition to potential price appreciation.
  3. Transparency and authenticity: Large cap projects tend to be more transparent and authentic in their operations. They provide investors with access to project-related information, enabling informed decision-making. Publicly traded large cap companies are also required to provide periodic financial statements to their investors.
  4. Trust and community support: Large cap tokens have gained trust and support from the crypto community over time. They have a strong following and are generally considered safer investment options.

On the other hand, small cap tokens focus more on business objectives and can experience rapid growth.

However, their growth is often more variable, making them more volatile and sensitive to market conditions.

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