Understanding Market Capitalization/Market Cap/MCAP
Market capitalization, also known as market cap or MCAP, refers to the total market value of a cryptocurrency.
It is determined by multiplying the current market price of each individual coin or token by the total supply of coins or tokens.
Market capitalization is a significant metric for assessing the size and value of a cryptocurrency. Investors use it to evaluate the appeal of a specific coin or token’s appeal and compare different cryptocurrencies to identify the most valuable ones.
The Significance of Market Capitalization in Crypto
Market capitalization plays a crucial role in the crypto industry as it provides insight into the overall worth of the market.
It also serves as a measure of liquidity and the overall value of a cryptocurrency.
By tracking market capitalization, investors can determine whether a cryptocurrency is undervalued or overvalued and make informed investment decisions.
Furthermore, market capitalization enables the comparison of different cryptocurrencies based on their relative sizes.
Different Categories of Market Capitalization
Cryptocurrencies can be classified into various market cap categories, including:
- Large-cap cryptocurrencies are the most substantial and well-established cryptocurrencies with market capitalizations of $10 billion or more.
- Mid-cap cryptocurrencies: Mid-cap cryptocurrencies fall within $1 billion to $10 billion in market capitalization.
- Small-cap cryptocurrencies are relatively smaller and less established, with market capitalizations below $1 billion.
- Micro-cap cryptocurrencies: Micro-cap cryptocurrencies have market capitalizations of less than $100 million.