The crypto market is similar to the stock exchange market in many senses. Several factors can affect the rise and fall of prices, and experienced crypto traders take account of these factors before investing in any coin. There are thousands of cryptocurrencies from which. Some are popular and easy, such as BTC and ETH prices, while others are not so popular. The primary way to know about the volatility of coins is to know about their crypto market cap.
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What Is Crypto Market Cap?
Crypto market cap estimates the total value of crypto coins, USDC price and tokens. The total value of coins worldwide is estimated using the total number of coins that have been mined multiplied by the value of a single coin. In simple terms, the total dollar value of a coin is called the market cap of that coin.
For example, there are more than 19.14 million bitcoins mined, having a value of $24,685 for each coin. The market cap of bitcoin is around $ 472.87 billion. The total market cap of all cryptos is around $1 trillion.
Why Is Crypto Market Cap Important?
Crypto market caps are very important to determine the value and stability of a coin. Is it a rough estimation of how volatile the coin market is? Well, even the largest and most powerful crypto is volatile and can lose its value but is unaffected by minor panic layers.
The crypto market cap is the available coin the trader can sell or purchase. Suppose there are whims or chaos in the market. In that case, small market cap coins not available in more quantity can easily go into an overbought or oversold state, leading to tremendous price fluctuation.
Coins with a high market cap are unaffected because a few thousand supply and demand gap will not affect the cumulative price and can easily overcome the layers.
How To Figure Out Crypto Market Cap?
Based on their market cap, the cryptos can be classified into low-risk, medium-risk, and high-risk investments. These are the categories of cryptos based on market cap:
These cryptos have a market cap of more than $10 billion. These low-risk investment coins are best suited for long-term investment because they are highly unlikely to go in the loss for a long duration.
These cryptos have a market cap between $1 billion and $10 billion. These currencies have high potential, but they are risky for long-term investment.
These currencies have a market cap of less than $1 billion. They are extremely vulnerable to market fluctuations and highly unrecommended for long-term investments.