What is market cap in cryptocurrency?

What Is Market Cap in Cryptocurrency?

Market cap (market capitalization) is the total value of all coins or tokens in circulation. It is calculated as current price times circulating supply. For example, if 1 million coins exist and each is worth Rs 100, the market cap is Rs 10 crore. It is used to compare the relative size of different cryptocurrencies.

Why It Is Used

Price alone can be misleading. A coin at Rs 1 with 1 billion in supply has a much larger market cap than a coin at Rs 100 with 1 million supply. Market cap helps you see how the market values the whole project. It is often used for rankings (e.g. Bitcoin first, then Ethereum).

Limitations

Market cap does not tell you liquidity (how much you can trade without moving the price). Fully diluted valuation (FDV) uses total supply instead of circulating supply and can show future dilution. Use market cap as one metric, not the only one, when comparing or investing.