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Market Cap Formula:
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Market capitalization (market cap) is the total market value of a cryptocurrency's circulating supply. It is calculated by multiplying the current market price of a single coin by the total number of coins in circulation.
The calculator uses the market cap formula:
Where:
Explanation: This simple multiplication gives the total market value of all circulating coins at the current price point.
Details: Market cap is a crucial metric in cryptocurrency analysis as it indicates the relative size and dominance of a cryptocurrency in the market. It helps investors compare different cryptocurrencies and assess their market position.
Tips: Enter the current price per coin in USD and the circulating supply. Both values must be positive numbers for accurate calculation.
Q1: 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 value if all coins were in circulation.
Q2: Why is market cap important in crypto investing?
A: Market cap helps investors understand a cryptocurrency's size, stability, and growth potential compared to other projects in the market.
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 through mining, staking, or token burns.
Q4: What are the limitations of market cap as a metric?
A: Market cap doesn't account for liquidity, token distribution, or market manipulation. 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 and Ethereum consistently maintaining the top positions due to their large market valuations.