What is market capitalization in cryptocurrencies? The guide you need.

Question

To understand if a crypto has a future, there are several factors at play. Market capitalization seems to be one of the most important 🔍

Market capitalization: the basics

It is the metric that shows the total value of a cryptocurrency in the market 📊 Investors constantly use it. It is key.

It's easy to calculate: you multiply the circulating tokens by their current price. Bitcoin and Ethereum dominate this ranking. It's no coincidence 🚀

There is also something called Fully Diluted Valuation. It considers all possible tokens, even those that are not yet in circulation. A more complete view, let's say 🔮

Investors do not rely solely on these numbers. They mix them with trends, news, and a bit of intuition to make decisions.

How it is calculated

The formula is simple:

Market capitalization = Current price × Circulating supply

And the circulating supply:

Circulating supply = Total – Locked – Burned

A quick example. Bitcoin at $60,000 with 20 million circulating:

$60,000 × 20,000,000 = $1.2 trillion 💰

Why does it matter so much?

Growth potential 📈

Small projects can grow more. Or not. A small market capitalization guarantees nothing. The team and its vision matter as much or more.

Comparison between projects 🏆

It allows you to see who is who. The leaders set the trend. The others follow.

Market Liquidity 💧

Large caps, more liquidity. Small caps, more risk of getting stuck in a position.

Investment decisions 🧠

Bitcoin and Ethereum are for the patient. Medium and small projects are for those seeking thrills. And quick profits, perhaps.

Types by size

Megacaps 🌟

More than $100,000 million
Bitcoin, Ethereum
The giants. They will not disappear tomorrow.

Large Caps 🌠

Between $10,000-100,000 million
BNB, XRP, USDC
Established projects. They will survive.

Mid Caps ⭐

Between $100-10,000 million
Near, ICP, UNI
Rapid growth. Many in DeFi.

Low Caps 💫

Between $10-100 million
HIFI, CTK, NKN
New. Interesting. Risky.

Micro Caps ✨

Less than $10 million
Memecoins and newly born DeFi projects
Crypto casino, basically.

Final thoughts

Market capitalization is important. It's not everything 🧐 To invest well:

Research the project. Not just the numbers.
Look to the future. Does it make sense?
Follow the news. The crypto world changes every day.
Diversify. Never bet it all.

Market capitalizations change. Sometimes, too fast 🕰️

And remember: lower market capitalization, higher risk. Micro caps are pure speculation. Be careful with that 🔍

You can follow all of this on Coinmarketcap, CryptoRank, or Coingecko 📱

Did that make it clearer for you? Market capitalization is just one piece of the puzzle. Important, yes. Definitive, no. The crypto universe is much more complex... and fascinating! 🚀🌕