Market Cap

An important metric for traders, market cap — or market capitalisation — is a benchmark for understanding a cryptocurrency’s relative weight in the market. It refers to the total value of a cryptocurrency in circulation, which is derived by multiplying the cryptocurrency’s price by the total number of coins or tokens in circulation.

Market cap = Price * Total number of coins/tokens in circulation

For example, if a cryptocurrency is trading at $5 with a total of 10,000,000 tokens in circulation, the market cap for this cryptocurrency is $50,000,000.

In the cryptocurrency world, market cap is differentiated into three categories:

• Large-cap cryptocurrencies — Crypto assets with a market cap of over US$10 billion. These are generally considered the safest and most reliable options in the crypto market, with lower risks and higher liquidity.

Examples: Bitcoin (BTC), Ethereum (ETH), Tether (USDT), USD Coin (USDC)

• Mid-cap cryptocurrencies — Crypto assets with a market cap between US$1 billion and US$10 billion. These are typically cryptocurrencies with a growing number of users.

Examples: Cronos (CRO), Avalanche (AVAX), TRON (TRX)

• Small-cap cryptocurrencies — Crypto assets with less than US$1 billion in market cap fall into this category. This group mainly consists of new projects and has higher volatility.

Examples: Fantom (FTM), Green Metaverse Token (GMT), Dash (DASH)