Market cap, on the other hand, represents the total value of a cryptocurrency based on its price and circulating supply. It represents the amount of money needed to purchase one coin or token of the currency. In the cryptocurrency space, market capitalisation (market cap for short) plays a crucial role for traders understanding the overall value and significance of a particular digital asset. In this article, we explore what market cap is, why crypto traders think it is important, how it relates to crypto asset valuation, and how to calculate it.

Since 19.67 million BTC have been mined so far, we say that this is the circulating supply of Bitcoin. Cryptocurrency exchanges provide markets where cryptocurrencies are bought and sold 24/7. Depending on the exchange, cryptocurrencies can be traded against other cryptocurrencies (for example BTC/ETH) or against fiat currencies like USD or EUR (for example BTC/USD).

Market cap provides an indication of the overall value and significance of a cryptocurrency, while trading volume reflects the level of activity and liquidity in the market. It is a record of capital being invested in a crypto and is used to estimate the total value of the cryptocurrency. The below market cap calculator tool helps you to quickly calculate the market capitalization of a particular crypto asset. In Bitcoin, miners use their computer hardware to solve resource-intensive mathematical problems. The miner that reaches the correct solution first gets to add the next block to the Bitcoin blockchain, and receives a BTC reward in return. Tokens, on the other hand, are crypto assets that have been issued on top of other blockchain networks.

However, an increase in supply also tends to lead to a lower price per unit, and the two cancel each other out to a large extent. In practice, an increase in price per unit is the main way in which a cryptocurrency’s market cap grows. To know the market cap of popular crypto currencies you can use websites like CoinMarketCap where they provide enough data about a coin or a token.

  1. There, you will be able to find a list of all the exchanges where the selected cryptocurrency is traded.
  2. Bitcoin is the oldest and most established cryptocurrency, and has a market cap that is larger than all of the other cryptocurrencies combined.
  3. It is important to consider other factors, such as the project’s technology, team, and adoption, when assessing an asset’s potential.
  4. In the case of Bitcoin, as long as you control the private key necessary to transact with your BTC, you can send your BTC to anyone in the world for any reason.

Positive news and developments surrounding cryptocurrencies can increase buyer confidence and drive up market cap. Conversely, negative news or regulatory actions can lead to a decrease in market cap. Now, let’s provide a simple theoretical example of how the value of stablecoins actually stays stable.

It is important to consider both crypto market cap and trading volume when assessing the potential of a cryptocurrency. For smaller alternative cryptocurrencies or altcoins, there can be noticeable price discrepancies across different exchanges. At CoinCodex, we weigh the price data by volume so that the most active markets have the biggest influence on the prices we’re displaying. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by to invest, buy, or sell any coins, tokens, or other crypto assets.

What Impacts Crypto Market Caps?

On exchanges, traders submit orders that specify either the highest price at which they’re willing to buy the cryptocurrency, or the lowest price at which they’re willing to sell. These market dynamics ultimately determine the current price of any given cryptocurrency. Crypto prices are calculated by averaging cryptocurrency exchange rates on different cryptocurrency trading platforms. This way, we can determine an average price that reflects cryptocurrency market conditions as accurately as possible.

What Is the Total Market Cap?

Once you find the exchange that suits you best, you can register an account and buy the cryptocurrency there. You can also follow cryptocurrency prices on CoinCodex to spot potential buying opportunities. The term DeFi (decentralized finance) is used to refer to a wide variety of decentralized applications that enable financial services such as lending, borrowing and trading. DeFi applications are built on top of blockchain platforms such as Ethereum and allow anyone to access these financial services simply by using their cryptocurrency wallets. Lastly, and notably, market cap can be influenced by market manipulation and speculative trading.

Outside of stablecoins, cryptocurrency prices can change rapidly, and it’s not uncommon to see the crypto market gain or lose more than 10% in a single day. Crypto market capitalization or “crypto market cap” for short is a widely used metric that is commonly used to compare the relative size of different cryptocurrencies. On CoinCodex, market cap is the default metric by which we rank cryptocurrencies on our frontpage. We bitcoin halving in 2020 and why it is of huge importance also track the total cryptocurrency market cap by adding together the market cap of all the cryptocurrencies listed on CoinCodex. The total market cap provides an estimate on whether the cryptocurrency market as a whole is growing or declining. Let’s take a look at the market caps and price charts of some popular cryptocurrency assets, including Bitcoin, Ethereum, and other popular coins and tokens (as of February 2024).

The CoinCodex Cryptocurrency Price Tracker

A cryptocurrency is a digital currency that keeps records about balances and transactions on a distributed ledger, which is most commonly in the form of a blockchain. Cryptocurrencies enable peer-to-peer transactions between participants across the globe on a 24/7 basis. However, crypto market caps can also give us a fact-based look at how altcoins are performing — a much-needed source of objectivity away from social media. Let’s imagine that an altcoin is currently worth $100, and it has a circulating supply of 25 million.

Circulating supply — which looks at the number of coins available to the public — isn’t the only method for calculating a crypto market cap. Alternatives include calculating the total supply (factoring in assets that might be locked up or reserved). Crypto market cap and trading volume are two important metrics in the crypto market, but they represent different aspects of a cryptocurrency’s value.

A blockchain is a type of distributed ledger that is useful for recording the transactions and balances of different participants. All transactions are stored in blocks, which are generated periodically and linked together with cryptographic methods. Once a block is added to the blockchain, data contained within it cannot be changed, unless all subsequent blocks are changed as well. If you want to buy a particular cryptocurrency but don’t know how to do it, CoinCodex is a great resource to help you out. Find the cryptocurrency you’re looking for on CoinCodex and click the “Exchanges” tab. There, you will be able to find a list of all the exchanges where the selected cryptocurrency is traded.

Let’s say that a company creates Stablecoin X (SCX), which is designed to trade as closely to $1 as possible at all times. The company will hold USD reserves equal to the number of SCX tokens in circulation, and will provide users the option to redeem 1 SCX token for $1. If the price of SCX is lower than $1, demand for SCX will increase because traders will buy it and redeem it for a profit.

These factors can artificially inflate or deflate the market cap of an asset, making it important for traders to conduct thorough research and analysis before making decisions. For example, Bitcoin’s maximum supply is 21 million, so its market cap is limited by max supply but can still rise if the coin price increases. For example, if Bitcoin is currently worth US$50,000, and its current circulating supply is where to buy audius token 20 million, then its market cap is just over US$1 trillion. Cryptocurrencies that reach consensus through mining are referred to as Proof-of-Work coins. However, alternative designs such as Proof-of-Stake are used by some cryptocurrencies instead of mining. Cryptocurrencies such as Bitcoin feature an algorithm that adjusts the mining difficulty depending on how much computing power is being used to mine it.

In reality, the market cap is simply a measure of the total value of a cryptocurrency based on its price and circulating supply. ICO stands for Initial Coin Offering and refers to a method of raising capital for cryptocurrency and blockchain-related projects. The project will then offer the tokens for sale to raise the capital necessary for funding development. Even though there have been many successful ICOs to date, investors need to be very careful if they are interested in purchasing tokens in an ICO. These cryptocurrencies are required to pay for transaction fees and basic operations on the blockchain.

What is cryptocurrency circulating supply?

Multiplying the two tells us what the crypto market cap is — in this case, $2.5 billion. As the crypto market continues to evolve and mature, market cap will remain an important metric for investors and traders. Staying informed and keeping up with the latest buy $5 of bitcoin cash buy $5 worth of polkadot market data will help traders navigate the dynamic world of cryptocurrencies to make informed decisions. It is important to consider market cap in conjunction with other factors like the project’s technology, team, and adoption when making buying decisions.