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What Is Market Capitalization in Crypto?
Market cap is price times circulating supply. Learn what it tells you, and what it hides.
The formula
Market capitalization equals a coin's current price multiplied by the number of coins in circulation. If a coin costs 2 dollars and 100 million are circulating, its market cap is 200 million dollars.
Why price alone is misleading
A coin that costs 0.01 dollars is not necessarily cheaper than one that costs 1,000. What matters is how many coins exist. Market cap lets you compare the size of different projects.
Circulating vs fully diluted
Fully diluted valuation uses the maximum future supply. A big gap between the two means many tokens are yet to be released, which can put pressure on the price.
Its limits
Market cap is only a rough measure. Thinly traded coins can show a large market cap that could never be sold at that value, so also look at trading volume and liquidity.
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Educational content only, not financial advice. Crypto assets carry a high risk of loss.
Keep learning
Look up unfamiliar words in the crypto glossary or browse coin markets.