What does market cap mean in the world of cryptocurrency?

The crypto market cap is ever-changing. That can be said of all investments - there are always price movements in any asset class - but it is particularly true with crypto. Any crypto traded through blockchain technology is volatile. What does a changeable market cap mean?

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What does market cap mean in the world of cryptocurrency?
  • Calculating a figure for a market cap of crypto on any given day is hard and requires sophisticated technology
  • Crypto’s market cap had previous highs of $3048bn in November 2021. In November 2022, it was $836.77bn
  • Knowing the market cap of crypto may be hard, but it can be a good way to ascertain market sentiment
  • The market caps of individual cryptos can range from hundreds of billions to next to nothing

FAQs - Cryptocurrency market cap

  • What are large-cap cryptocurrencies?

    Large-cap cryptocurrencies are those with a market cap of over $10 billion. Large-cap investments are often considered 'safer' in the world of stocks and shares. However, cryptocurrency market commentators often say that large-cap cryptos offer a good risk-reward profile.

  • What are the most popular cryptocurrencies?

    If you're going by market cap alone, Bitcoin's and Ethereum's market caps make them the most popular cryptocurrencies. However, market capitalisation is not the only way to look at popularity. You could look at supply or trading volume over a year, too.

  • How are cryptocurrency prices calculated?

    Crypto prices are determined as any asset price is - through supply and demand. Essentially, the more there is of something, the less it will be worth, as suppliers cannot achieve as high a price when competing with others. Demand is the other side of the equation, so if demand is high, suppliers can push their prices up, and if demand is low, they will sell assets more cheaply.

  • Is investing in cryptocurrency hard to do?

    There are numerous platforms where you can invest in cryptos, making buying and selling digital currencies far easier. What makes it challenging is adding it to a portfolio and ensuring it fits with your risk profile - given how volatile and risky it is perceived to be. It's far from impossible, however, and given the right circumstances, it could be an option for you if you feel comfortable trading it.

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If you want to look at the market value of crypto assets, whether in U.S. dollars or the British Pound, you'll be setting yourself a challenging task. That's because, in the world of cryptocurrency, knowing the market cap means summing up every single crypto out there. But, getting a total value of all mega-cap, large-cap, mid-cap, and small-cap cryptocurrencies is tough. 

Getting a single valuation of just one cryptocurrency is simple enough. You need to look at the current price versus the number of coins to determine the current market value of just that one asset. Then you add all those values together to get the number of the total market. 

The maths or metrics of that is relatively easy. Still, when you consider the sheer number of cryptocurrencies around, it's a lot harder. Also, it's almost certainly an out-of-date figure by the time you have finished your calculation, given crypto's volatility. 

Technology, of course, is a huge helping hand. It's possible to have all the market data - looking at trading volume, total supply, circulating supply and current price - to determine the market cap. And if you're happy with a weekly average to smooth out the volatility, you can get a good indicator of how much the market is worth. 

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The cryptocurrency market cap

Given how difficult it is to come to just one figure and how quickly it will change, it's good to go off historical numbers. According to Statista, on 14th November 2022, the overall cryptocurrency market capitalisation over the week was $836.77 billion. That sounds like an enormous number. However, while the trading volumes for crypto are still huge and it enjoys good liquidity, its market cap peak in 2021 was $3,048 billion - a massive decrease. 

Popular cryptos and their market caps

The realm of decentralised finance (DeFi) sees new cryptocurrencies and NFT-style products established frequently. However, there are several well-known cryptocurrencies, and it can be helpful to know their market caps to drown out the noise. 

According to Binance, as of 16th November 2022, the following cryptos have these market caps:

Cryptocurrency (ticker)Market cap (USD)
Bitcoin (BTC)$320,700 million
Ethereum (ETH)$150,406 million
Tether (USDT)$66,058 million
BNB (BNB)$43,625 million
Ripple (XRP)$19,144 million
Cardano (ADA)$11,506 million
Solana (SOL)$5,101 million
Litecoin (LTC)$4,123 million
Stellar Lumens (XLM)$2,356 million
Bitcoin cash (BCH)$1,992 million

Why is knowing the crypto market cap important? 

It's hard to know a single cryptocurrency's market cap - or that of the total market - at any given moment. But getting a broad spectrum view, including altcoins or any stablecoins, is helpful as it indicates what's happening in the crypto world. Taken individually, if the market cap of a single crypto begins to fall, it can sometimes have a ripple effect on the rest of the market, which can spark a mass sell-off. 

So it's a great way of showing market sentiment and how people view crypto, which is vital given how it is still a relatively new asset and how volatile it can be. 

Market caps and cryptocurrency

Looking at market caps and cryptocurrency can be an excellent way to gain knowledge of the market and its structure. For some, looking at how much the entire asset class is worth is a good indicator that could spark interest in adding a crypto asset to their portfolio. For example, if the market has a mass sell-off, it could be a very cheap time to add crypto to your range of investments. Alternatively, it could highlight to some that the asset may be too risky to ever purchase. 

Either way, knowing the market caps of individual cryptos and the whole asset class may be time-consuming, but it can be helpful. It can be a high-level way of keeping an eye on an asset class that is still evolving and can change rapidly. Its volatility is one reason so many investors are wary of it, but also why some add it to their portfolios. The flip side of quick lows is quick highs too.

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