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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 market value of a cryptocurrency's circulating supply. It is calculated by multiplying the current price of a single coin by the total number of coins in circulation.
The calculator uses the market cap formula:
Where:
Explanation: This calculation provides an estimate of the total value of all coins currently available on the market, which is a standard measure of a cryptocurrency's size and relative importance in the market.
Details: Market cap is crucial for comparing the relative sizes of different cryptocurrencies. It helps investors understand the value and potential growth of a cryptocurrency, with larger market caps generally indicating more established and stable projects.
Tips: Enter the current price per coin in USD and the circulating supply of coins. Both values must be positive 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 supply. It helps investors compare different cryptocurrencies and assess their relative size and stability.
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 the maximum possible supply. The latter shows what the market cap would be 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 rewards, 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 coins held by founders that might be sold. It's also less meaningful for cryptocurrencies with highly volatile prices or uncertain circulating supply data.
Q5: How does market cap rank cryptocurrencies?
A: Cryptocurrencies are typically ranked by market cap, with Bitcoin usually having the largest market cap, followed by other major cryptocurrencies like Ethereum and Binance Coin.