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Author: Admin | 2025-04-27
On December 18 2024, the total cryptocurrency market capitalisation surpassed a whopping US$3.7 trillion. That remains the all time high for the asset class which has only existed for approximately 15 years.Yes, that’s a huge number. But without the context, what does it really mean? Is it an indicator of any historical trend, growth potential, or actual dollar amount?Let’s dive into the most commonly touted crypto statistic: market cap. We’ll discuss what it really means, how it’s calculated, and how this metric could help you make decisions on future crypto investments.Definition:What is Market Cap in Crypto?How is Market Cap Calculated?Difference Between Small, Mid, & Large-Cap CryptocurrenciesMarket Cap vs. Cash InflowOther Metrics & Ways to Evaluate CryptocurrenciesMarket Cap vs VolumeTop 10 Cryptos by Market Cap**Market Cap FAQsStart Building Your Crypto Portfolio with Caleb & BrownDefinition:In the crypto market, market capitalisation (market cap) is the total dollar value of all coins in circulation. Market cap can be used to measure the value of a specific cryptocurrency, as well as refer to the total capitalisation of all cryptocurrencies in existence.What is Market Cap in Crypto?Market cap is a metric used to help traders and investors understand the value or value potential of a particular cryptocurrency. It’s a concept with roots in traditional investing, where market cap is used to quantify the dollar value of shares in circulation for a company. The size of a market cap can help investors make inferences about the risk profile of a coin, its potential for long-term growth, and its market dominance.How is Market Cap Calculated?There are two common ways to express cryptocurrency market cap: circulating supply or fully diluted supply. Market cap can be calculated by using the number of coins currently in circulation (circulating supply). Or it can be calculated using the number of coins that will be in circulation once the limit is reached (full diluted supply). Given that this serves mainly as a tool for making investment decisions in the present, circulating supply is almost exclusively used when calculating market cap. However, if you’re set to be a long term holder it’s worth considering the impacts of a fully diluted supply on your stake.Market cap based on circulating supply is calculated with the following formula:Current Price x Circulating Supply = Market CapDifference Between Small, Mid, & Large-Cap CryptocurrenciesWhen using market cap to discuss cryptocurrencies, they are generally divided into three categories: small, mid, and
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