1. What is Market Capitalization?

Market capitalization (market cap) is the total market value of a cryptocurrency's circulating supply. It's a key metric used to rank cryptocurrencies and assess their relative size in the market.

2. How Market Cap is Calculated

The market cap is calculated using this simple formula:

Where:

• \( Price \) — Current price of one unit of the cryptocurrency in USD
• \( Circulating\ Supply \) — Number of coins or tokens currently in circulation

Explanation: The formula multiplies the current price of a single coin by the total number of coins available in the market.

3. Importance of Market Cap

Details: Market cap helps investors understand the relative size of different cryptocurrencies. A higher market cap typically indicates a more established and potentially less volatile cryptocurrency.

4. Using the Calculator

Tips: Enter the current price per coin in USD and the circulating supply (total number of coins currently available). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between market cap and fully diluted valuation?
A: Market cap uses circulating supply, while fully diluted valuation uses the maximum possible supply that will ever exist.

Q2: Why is market cap important in crypto?
A: It helps compare the relative size of cryptocurrencies and is often used to categorize them (large-cap, mid-cap, small-cap).

Q3: Can market cap be manipulated?
A: Yes, through practices like wash trading or artificially inflating prices with low liquidity, which is why it's important to consider other metrics too.

Q4: What are typical market cap ranges?
A: Large-cap: >$10B, Mid-cap: $1B-$10B, Small-cap: <$1B (these ranges may change with market conditions).

Q5: Does a higher market cap mean a better investment?
A: Not necessarily. While large-cap coins are generally more stable, smaller-cap coins may offer higher growth potential (with higher risk).