Market Capitalization/Market Cap/Mcap
| What is Market Capitalization? Market Capitalization, or "Market Cap" for short, is the total market value of a cryptocurrency. In other words, it is the price of a cryptocurrency multiplied by the total number of coins or tokens in circulation. For example, let's say that Bitcoin is trading at $10,000 and there are 18 million Bitcoin in circulation. This means that the market cap of Bitcoin is $180 billion. Market cap is a good way to compare different cryptocurrencies because it takes into account the total supply of each coin or token. For example, even though Ethereum has a lower price than Bitcoin, its market cap is actually higher because there are more Ethereum in circulation. What are the benefits of market cap? Market cap is a good way to compare different cryptocurrencies because it takes into account the total supply of each coin or token. For example, even though Ethereum has a lower price than Bitcoin, its market cap is actually higher because there are more Ethereum in circulation. This is helpful because it gives you a more accurate picture of which cryptocurrency is more valuable. It also makes it easier to compare cryptocurrencies of different prices. What are the drawbacks of market cap? One of the main drawbacks of market cap is that it doesn't take into account the different levels of utility or usefulness of each cryptocurrency. For example, even though a cryptocurrency like Ripple has a lower market cap than Ethereum, it doesn't mean that Ripple is less useful. In fact, Ripple is often used by banks and financial institutions because of its unique features. Another drawback of market cap is that it can be easily manipulated. For example, if a cryptocurrency has a low market cap, it might be because the team behind it is purposely keeping the supply low in order to drive up the price. What is the difference between market cap and price? The main difference between market cap and price is that market cap takes into account the total supply of a cryptocurrency, while price is simply the current price of one coin or token. Market cap is a good way to compare different cryptocurrencies because it gives you a more accurate picture of which cryptocurrency is more valuable. However, it is important to remember that market cap is just one factor to consider when comparing cryptocurrencies. |
Share this glosssary
