What is Market Cap? How to calculate Market Cap in crypto?

    Oct 29, 2022

    The term "market cap" is commonly used in the financial industry in general and the cryptocurrency industry in particular. Market capitalization is important in helping investors toward intelligent investment choices. So what is a market cap? What is the role and how to calculate Market Cap? Find out with in this article.

    What is Market Cap?


    Market Cap stands for Market Capitalization, understood as market capitalization, represents crypto assets, represents the size of a company in the financial market including the total value of the number of shares of a listed company. listed, excluding self-held shares.

    In the crypto market, the Market Cap is the capitalization of the cryptocurrency market. The capitalization of each coin is calculated by the formula: Coin price x Number of coins in circulation.

    Another important concept that we need to know is Fully Diluted Valuation (FDV). This is the crypto market cap in case the token supply reaches its maximum.

    Market Cap and FDV are widely used in evaluating and comparing the value of crypto assets. This is considered the simplest and most basic way to know how a coin/token is being valued in the market.

    Differentiate between total market capitalization and diluted market capitalization


    • Total market capitalization is calculated as the sum of the value of Bitcoin, Altcoin, Stablecoin, Token and all crypto market assets. This metric shows the size of the blockchain market in general and the crypto market in particular.
    • Diluted market capitalization helps users estimate the future value of a crypto project. Diluted market capitalization is the calculation of the maximum supply of a coin and is calculated using the current price formula that equals the maximum supply of a crypto asset.

    The role of Market Cap in the crypto market

    • Market Cap is an extremely useful tool for all financial investors, especially in the field of cryptocurrencies. Each type of crypto asset has a different maximum amount of tokens in circulation and token supply. Therefore, traders cannot judge them based on the token price, but must rely on a metric called Market Cap. In other words, Market Cap is a simple way for investors to determine the market capitalization of crypto assets because each has a different supply and token.
    • It is an extremely important factor that helps investors determine the strength and growth potential of each specific asset class in the market.

    How to calculate Market Cap?


    Market Cap is calculated by multiplying the number of tokens in circulation by the current price of that token. On the other hand, FDV is calculated by multiplying the maximum token supply by the current price of that token.

    Sizes of Market Cap

    Through the value of Market Cap, we can classify current projects into 3 categories.

    Large Cap

    Coins with a large Cap are those with a market capitalization of over $1 billion. According to statistics at the present time, there are 47 coins classified as large-cap value coins, led by Bitcoin (BTC).

    The characteristics of large-cap coins are that they tend to be stable, have high liquidity, but have a lower growth potential.

    Mid Cap

    Coins with a market cap of $100 million to $1 billion are classified as mid cap assets. The majority of crypto assets of this type are chosen by many investors to invest because of their good return along with medium risk. The liquidity of these cryptocurrencies is quite good and accepted by most investors.

    Low Cap


    For crypto assets with a market cap of less than $100 million, it is classified as a small or low market cap. These are usually projects that have just launched and entered the market, which are in the early stages of development. This can be considered an option worth considering for investment because the return when investing in these projects is very high, but the risk is also higher. The price of these coins can immediately bottom. The liquidity of coins with low Market Cap is also relatively low, making trading often more difficult, slippage also occurs easily.

    If you observe the market, you will find that the majority of scam projects fall into this category. Therefore, before making investment decisions, traders need to learn carefully about project information to choose quality projects with high growth potential and profitability.


    Market Cap in crypto is a factor considered by investors to choose coins to invest in. This is a very important factor, so hopes that through this article, you have gained a lot of useful information. Don't forget to follow Market247's channels to update more knowledge of the crypto market.


    Should I invest in coins with a large Market Cap?

    The larger the Market Cap, the more valuable and reputable the coin will be. However, coins with a large Market Cap usually have a low growth rate. Therefore, you should carefully weigh the benefits and risks before making an investment decision.

    Do NFT assets have a Market Cap value?

    Have. The Market Cap of an NFT is calculated as the floor price of the NFT set multiplied by the number of NFTs in that collection.

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