Market Capitalization (Market Cap)
Market Cap is the total dollar market value of a cryptocurrency's circulating supply, calculated by multiplying the current price by the number of coins in circulation.
Market Capitalization is a critical metric for evaluating cryptocurrencies, allowing investors to compare the aggregate value of different assets beyond just their unit price. While price indicates what one coin costs, market cap reflects the total value invested in the network.
Cryptocurrencies are often categorized by market cap:
- Large-cap ($10B+): Bitcoin, Ethereum. Generally considered safer, lower volatility investments.
- Mid-cap ($1B - $10B): Established projects with growth potential but higher risk.
- Small-cap (<$1B): High risk, high reward potential, often prone to extreme volatility.
It is important to distinguish between Circulating Supply (used for standard Market Cap) and Fully Diluted Valuation (FDV), which uses the Total/Max Supply.
graph LR
Center["Market Capitalization (Market Cap)"]:::main
Rel_stablecoin["stablecoin"]:::related -.-> Center
click Rel_stablecoin "/terms/stablecoin"
Rel_rebase_token["rebase-token"]:::related -.-> Center
click Rel_rebase_token "/terms/rebase-token"
Rel_proof_of_stake_pos["proof-of-stake-pos"]:::related -.-> Center
click Rel_proof_of_stake_pos "/terms/proof-of-stake-pos"
classDef main fill:#7c3aed,stroke:#8b5cf6,stroke-width:2px,color:white,font-weight:bold,rx:5,ry:5;
classDef pre fill:#0f172a,stroke:#3b82f6,color:#94a3b8,rx:5,ry:5;
classDef child fill:#0f172a,stroke:#10b981,color:#94a3b8,rx:5,ry:5;
classDef related fill:#0f172a,stroke:#8b5cf6,stroke-dasharray: 5 5,color:#94a3b8,rx:5,ry:5;
linkStyle default stroke:#4b5563,stroke-width:2px;
🧠 Knowledge Check
🧒 Explain Like I'm 5
If you counted all the coins that exist for a [cryptocurrency](/en/terms/cryptocurrency) and multiplied that number by the price of one coin, you get the Market Cap. It tells you how big the project is compared to others, like comparing the size of two pizza pies, not just the price of a single slice.
🤓 Expert Deep Dive
Generated expert content