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Market Cap Formula:
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Market capitalization (market cap) is a key metric in cryptocurrency that represents the total value of all coins in circulation. It's calculated by multiplying the current price of a cryptocurrency by its total circulating supply.
The calculator uses the market cap formula:
Where:
Explanation: This calculation provides the total market value of a cryptocurrency's circulating supply, which is a standard metric for comparing the relative size of different cryptocurrencies.
Details: Market cap is crucial for understanding a cryptocurrency's market dominance, comparing different cryptocurrencies, and assessing investment potential. It's often a better indicator of value than price alone.
Tips: Enter the current price in USD and the circulating supply in coins. Both values must be non-negative numbers. The calculator will instantly compute the market capitalization.
Q1: Why is market cap important in cryptocurrency?
A: Market cap provides a more complete picture of a cryptocurrency's value than price alone, as it considers both price and circulating supply.
Q2: What's the difference between market cap and fully diluted market cap?
A: Market cap uses circulating supply, while fully diluted market cap uses maximum supply, showing potential future market size if all coins were in circulation.
Q3: How often should market cap be calculated?
A: Market cap should be calculated regularly as cryptocurrency prices are highly volatile and circulating supplies can change due to mining, staking, or token burns.
Q4: Are there limitations to market cap as a metric?
A: Yes, market cap doesn't account for liquidity, token distribution, or locked tokens. It should be used alongside other metrics for comprehensive analysis.
Q5: How does market cap affect cryptocurrency rankings?
A: Cryptocurrencies are typically ranked by market cap, with Bitcoin having the largest market cap, followed by Ethereum and other major cryptocurrencies.