Crypto market cap intro
Crypto market cap is something that many folks use to take their investment decision. The metric gives you an indication of which place the crypto is positioned about all the coins available on the market. You can clearly see that you can not rely only on this factor to take a wise decision.
As you may know, the crypto market is very volatile. One day a coin can be pumped and reach the 1 billion market cap and the next day, it will return to nearly nothing. The market is often driven by the hype and news that makes the people believe in the next coin to reach the planet Mars!
The reality of the crypto market cap
The crypto market cap is the replication of what exists in the market; like the stock and gold space. This gives you the total value of all the crypto available in US dollars.
I have seen coins appear in the top 20 without knowing they existed before. This is a little bit scary, a coin needs to gain popularity with an organic growth to be sustainable or otherwise you can expect a crash.
How is the crypto market cap calculated?
The calculation of the crypto market cap is straightforward and easy to grasp.
It represents the total coins in circulation X the current price in USD = The crypto market cap of the coin.
Let’s say Bitcoin has 16 000 000 coins and the value is 15000$.
You will apply the formula and obtain: 16 000 000 x 15000$ = 240 billion $ market cap.
The development team
What gives the true value of a coin and contribute to the prosperity of it? The development team. It is a critical aspect that you need to scrutinize. The team that will introduce the new feature and makes sure the environment is stable and everything is under control.
Take Litecoin as an example. The organic growth of this one has increased rapidly because the team is willing to take the risk and introduce features that users want. In the case of Litecoin, it his backed by Segwit, Lightning Network, and others great tehcnologies.
For a coin to succeed, it needs a community that uses it, make transactions and grow it organically. Also, when you have a great spirit among people who love and use it, many innovations and services appear on the ecosystem. In return, people can use and spend the coin to acquire goodies and services.
A coin without any purpose will die in the long run and you will find it in a graveyard.
When you have a coin that has a good value and not much liquidity, you can be in trouble to cash in the profit. What I mean, if you possess a crypto asset and not many buyers want it, you cannot sell your position to transfer the value to something else.
It is common in the crypto space to see an asset with a market cap in the millions and only a few thousands of dollars in trading during the last 24 hours.
The 24 hours volume
This indicator is important and gives you a healthy indication how much money has moved hands in the last 24 hours. Secondly, it gives the total amount that was exchanged on all the crypto trading exchanges for any coins listed on the crypto market cap websites.
Popular websites to check the crypto market cap
When you are a crypto enthusiast, you need to have good tools at your disposal to take decisions. The crypto market cap websites are the cornerstone were you can see all the prices in an instant snapshot!
The most popular and the one I check mostly all day:
The second one I discovered though Steemit and inspired me to write this post:
Last word about the market cap and beyond
The crypto market cap is the most popular indicator that people are watching constantly. You now know that you can check the following factors as well:
- Development team
- The community
- The last 24 hours trading volume
What is your view about the crypto market cap?
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