Market capitalisation is one of the indicators helping to determine the dominance and place of this or that asset in the market. Market cap indicator helps to assess both traditional assets and digital ones.
To receive market capitalisation, you should conduct the elementary action of multiplying the price of cryptocurrency today by the number of assets circulating in the market. So two elements determine the market cap: crypto coin price and total circulation.
The indicators of the market cap of different digital assets show many interesting things. For instance, the market cap of the leading crypto asset – Bitcoin, is twice more as that of the second-popular coin – Ethereum.
All crypto coins are divided into three groups by Market Cap:
- Big capitalisation indicator that reaches $10 billion and more. Such crypto assets are considered to be the most reliable and demonstrate the most stable growth in the long term perspective. These are market leaders that set the trend, moving the market up and down. The level of their dominance is scaling; their names are known everywhere. In unpredictable and aggressive trend chances in the crypto field, the large-cap coins are the strongest and less sensitive to collapses.
- Middle cap. Those crypto projects have a capitalization of over $2 billion and up to $10. These assets are less popular but demonstrate rapid growth. They are only gaining momentum, increasing their adoption and ability to compete with other crypto projects. Sometimes they reach even large-cap levels, showing their potential. Looking at the dynamics of mid-cap asset development, it is easy to see its future. Mid-cap coins are better investments because they are good for growth and they are more sensitive to the overall smart trends movements, so during the next bull trend, mod-cap coins are likely to multiply their value, unlike large-cap assets that are not likely to boost that high. Risks in investing in mid-cap coins are average.
- Low-cap coins have a cap between $300 million and $2 billion. These are mostly young and emerging projects that have not yet got their audience. Small-cap assets are increasingly sensitive to trends and changes and very fragile in the aggressive crypto market environment. Often, they do not stand the competition and pressure in the market and rarely live through crypto winter. However, those that manage to survive, prove to be strong and have all the chances to reach the next heights. Low-cap assets are the most sensitive to up and down trends and have a much higher potential to reach the moon compared with the two previous groups.
How Does Market Cap Affect Crypto Price?
The market cap is not the only measure that helps us understand the place and dominance of digital assets in the market. There are also other indicators that allow seeing the whole picture of the asset:
- Cryptocurrency price
- Trade volume.
Since the market cap depends on cryptocurrency rates, let’s discuss it. The price of crypto assets is changeable for the following reasons:
- Crypto is a relatively young market, so it is still fragile.
- Demand and supply are the key factors to affect cryptocurrency prices.
- The news background is able to create a buzz around crypto, spurring the industry up as well as causing the downtrend and massive frustration about crypto.
- Wales – large crypto investors that hold the most oast of coins released can intentionally manipulate the market to reduce or raise prices. Suppose some whales agree to sell out coins on the same day; what would it result in?
- The market trend and dominating coins. As we said at the beginning of the article, coins with large market caps set the trend for the market. We all remember how in the spring of 2022, the BTC rate collapsed, causing the overall market to drop in 2022.
On a broader scale, the global economic situation also has an impact on crypto prices, for it affects the ability of people to invest in general.
Another factor that is worth considering is trade volume. While market cap helps us understand the place of the asset in the ranking and its dominance and weight, then trade volume allows seeing how traded the coin is. That is an indicator showing how many “hands” the coins changed during the day. That is the total amount of all transactions that were done with the coin. We can say trade volume reflects the asset’s liquidity and helps us understand how easy it will be to sell this asset.
Where to Get Information About Cryptocurrency Prices Live?
You may use the popular resource Coinmarketcap, known to all crypto investors and traders worldwide. Or, if your goal is to buy crypto online, welcome to the WhiteBIT crypto exchange. It provides convenient and relevant crypto charts and data about assets’ market cap and trade volume, which you may analyze in certain time frames set on the chart. The platform adds only promising and reliable assets of different levels of market cap. So you may trade large-cap and low-cap coins on WhiteBIT.
To get the relevant information on cryptocurrency prices today, click the WhiteBIT calculator and enter the coin that interests you and the currency you have. So the calculator will display the price of the needed coin in the equivalent currency you have.