What Is Market Capitalization?
One of the most popular metrics for analyzing cryptocurrencies is using market capitalization often referred to as “market cap”. Market capitalization is one way to rank the relative size of a cryptocurrency. It is calculated by multiplying the Price by the Circulating Supply.
For example, the price of Litecoin is $90 and the total circulating supply is 54,000,000 LTC.
Market Cap = Price (90) X Circulating Supply (54,000,000 LTC)
Market Cap of Litecoin = $4,860,000,000
This number is important because using price alone as a metric can be deceiving. Zcash is $320, however it has a much smaller circulating supply and thus a smaller market cap. This means that the relative size of Zcash is much smaller than Litecoin even though it has a much higher price.
Market cap can be a good indicator for investors of the size and growth of a specific cryptocurrency. Investors also use market capitalization as a way to measure the growth of the entire cryptocurrency industry.
At the time of writing this article the total market cap of the entire cryptocurrency market is over $300,000,000 USD. (300 Billion) This number is calculated by adding up the market cap of all of the known and traded cryptocurrencies, which at the moment there are over 1,000.
This can also be a useful tool because you can measure individual market cap against the market cap of the entire industry.
For example, the market cap of the entire industry is $300,000,000 and the market cap of Bitcoin is $150,000,000, that means that Bitcoin is providing half the value in the entire cryptocurrency market.
The next highest market cap at the time of writing this article is Ethereum, with a market cap of $45,000,000. Comparing this to Bitcoin highlights just how dominant Bitcoin is at the moment.
Where Can I Find This Information?
There are a few websites and services that track market information including market cap, but lucky for you the Crypto Learning Academy does this all for you!
By clicking the “Cryptocurrency Market” tab at the top of the CLA homepage, you can view the entire list of cryptocurrencies ranked by market capitalization. In fact, why don’t you do that now! Click on the “Cryptocurrency Market” tab and see what the current market cap is for Bitcoin and for the entire market!