Bitcoin market cap charts
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Both sides make valid points. Crypto market cap is calculated by multiplying the circulating supply of a coin by its current price. As with stocks, cryptocurrencies are classified in terms of market cap.
In the world of stocks, the higher the market cap, the safer the investment. In the world of cryptocurrencies, a high market cap is less meaningful. If the market cap of a cryptoasset is high, it means that it trades at a high price, has a high circulating supply, or both.
If the market cap is low, it signals that the price per coin is low, there is little circulation, or both. This is all that market cap can reveal about a cryptocurrency. Nothing more.
Cryptocurrency
Crypto market cap is a source of controversy. There are those who claim that market cap reflects the amount of fiat currency invested in a cryptoasset.
See the up-to-date total cryptocurrency market capitalization ✔️ excluding Bitcoin ✔️ top ten cryptoassets by percentage of total market cap. Top cryptocurrency prices and charts, listed by market capitalization. Free access to current and historic data for Bitcoin and thousands of altcoins.
This is wrong. Consider an influx of new investors to a project with low trading volume. Absolutely not. The new market cap merely reflects the price that the last investor was willing to pay. Another example: take a new cryptocurrency with a circulating supply of , All that said, when considered with other indicators, crypto market cap can be useful. Liquidity measures the degree to which an asset can be bought or sold without causing a major price change. In most cases, high volume and high liquidity mean a healthy market that is difficult to manipulate.
Indeed, a classic way to measure the quality of a cryptocurrency is to check whether its trading volume is equal to or greater than its market cap. Crypto market cap has major drawbacks, yet it remains the go-to indicator for many investors, analysts, and commentators. This is unfortunate. At best, market cap can serve as a jumping-off point for evaluating a cryptocurrency. But it is only truly helpful when used in tandem with other metrics like trading volume.
You can find historical crypto market cap and crypto price data on CoinCodex, a comprehensive platform for crypto charts and prices. It excludes coins that are reserved or locked. Blockchain was invented by Satoshi Nakamoto for the purposes of Bitcoin. View details. Monthly trading volume for some of the more popular cryptocurrencies is similar to their respective market caps. To trick others into buying their coin, a community might try fake news stories, fake partnerships, or even forged endorsements from prominent public figures. Other project owners adopt the strategy of releasing a massive initial issue.
Although market cap is, at best, an incomplete indicator of cryptoasset quality more on that here , in some cases, it can be a useful starting point for analyzing an investment opportunity. For example, high market cap could indicate that a cryptocurrency is resistant to volatility. Low market cap indicates the opposite, that major news events or whale activity can significantly impact price.
However, crypto market cap can only take you so far. Over time, the simplicity of market cap has made it the most popular way to compare cryptoassets. For this reason alone, crypto market cap matters. Experienced investors will usually consider multiple indicators, but there are some who base their decisions exclusively on market cap. Crypto exchanges use market cap as a way to determine which coins to list — coins with higher caps are more likely to make it.
Exchange data aggregators tend to rank projects by market cap. Project owners take market cap seriously enough to spend time and money manipulating the circulating supply or price of their tokens. This is just one reason why crypto market cap is considered a misleading or unreliable indicator. As the crypto space matures, better tools will be developed that will provide market participants with in-depth, actionable information.
When that happens, market cap will likely lose its place as the leading crypto indicator. The market reached this level on January 7, Crypto market cap is calculated the same way as stock market cap, by multiplying the circulating supply of an asset by its price in fiat currency e. The calculation gets trickier when an asset is traded against another asset.
Price depends on who makes the calculation.
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The general price is calculated as a composite of spot prices used on crypto exchanges. For index funds, which have recently become popular, the calculation is adjusted to include variation in trading pair prices. The price that you see on online news aggregators Google, for example is usually the average price at which an asset trades on leading exchanges. In the crypto space, the problem of inadequate pricing is well-known.
Most pricing index issuers fail to detail how they price instruments or where they get their data. At Nomics, we strive to set this right. Our methodology takes the price at which an instrument last traded on each exchange, weighted by the general trading volume over the past 24 hours. More on our methodology here. When it comes to supply, it is worth noting that the calculation depends entirely on the token and the mechanics of its protocol. Although Bitcoin has a finite supply 21 million , most tokens are designed with a dynamic supply that increases over time. When calculating the market cap of a particular cryptoasset, it is the circulating supply that should be taken into account.
Circulating supply is the number of tokens that are currently available on the market. Circulating supply is a better metric than total supply because it excludes coins that are reserved or locked.
Cryptocurrency FAQ
To find Bitcoin's market cap, locate the value in the "market cap" column associated with the Bitcoin record in the table above. It is worth noting that, due to the finite supply of Bitcoin, at some point, circulating supply and total supply will be equal. Some investors view low market cap as synonymous with high profit potential. That is why many market participants favor cryptocurrencies with low market caps. They believe these currencies have more room for price appreciation. Others view low market cap cryptocurrencies as ground-floor opportunities.
Whatever the reasoning, low market cap cryptocurrencies are popular investments. Nomics lists cryptocurrencies with market caps as low as a few thousand dollars. However, you should avoid choosing an investment by market cap alone.
A Comparison of Cryptocurrency Price Trackers
Consider additional factors such as recent price changes, trading volume, circulating supply, and transparent volume, a feature unique to Nomics that shows the percentage of trading volume that occurs on reputable cryptocurrency exchanges. For more on transparency volume, see here. Market capitalization is often used to indicate the value of a company or stock. It is calculated by multiplying the total number of shares outstanding by the price per share. Investors calculate the value of a cryptocurrency by multiplying its circulating supply by its current price.
Though stock and crypto investors use the same indicator, the calculation differs in some respects. To calculate the market cap of a company, multiply shares outstanding by the current price per share. Shares outstanding reflects all stocks that are currently held by shareholders.
It even includes restricted shares held by corporate staff and share blocks held by institutional investors. Price, on the other hand, is affected by internal factors such as profit, expected profit, and plans for growth. How investors perceive these factors influences supply and demand and determines the price of a stock.
To find the market cap of a cryptocurrency, multiply circulating supply by current price. Circulating supply is similar to shares outstanding but only includes tokens that are available in the market. It excludes coins that are reserved or locked. The price of a cryptocurrency is usually calculated as an average of the spot price at which the instrument trades on leading exchanges. Cryptocurrency pricing in the context of index funds happens in a slightly more sophisticated way and is adjusted to include variation in trading pair prices.
Although market cap is used to value both companies and cryptocurrencies, there are differences in the way it is applied. For instance, shares outstanding takes into account all issued shares, including those held by corporate officers and big investors. Circulating supply ignores reserved or locked coins. As a result, crypto market cap only includes assets that are available for trading.
If crypto market cap followed the same logic as stock market cap, it would be based on total supply. A far more accurate calculation is achieved by using circulating supply. For more on the cons of using total supply, see the next question below. Another difference is pricing mechanics. While most stocks have fixed issuance mechanisms, in the case of cryptocurrencies, many protocols are designed to expand continuously, thus inflating token supply over time.
To compensate, one must analyze market cap in a broader context. The first cryptocurrency, Bitcoin, was launched in This goes to show how young the cryptocurrency market is compared to the stock market, which has had centuries to mature. We often make the mistake of copying stock market metrics and trying to shoehorn them into the world of cryptocurrencies.
So is the case with market capitalization. Market cap is applied to both stocks and cryptocurrencies, but there are differences in how the metric works in each case. In the world of stocks, market cap can reveal much about a company including corporate policies for example, the issuance or repurchase of shares , management style, and operational scale.