Breaking Down What Cryptocurrency’s Total Market Cap Means

Feb 12, 2023

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When you look at crypto, you might see dollar signs. You may feel you can buy some and hold it, and you’ll see the value increase. Sometimes this happens, though there’s no guarantee.

You can also spend crypto since some online merchants take it. Some brick-and-mortar stores even take it now, though they’ll usually only accept Bitcoin or Ethereum. You can spend your crypto or hold onto it. You can also trade it.

When you look at a coin’s value, you can see the price rise and fall, just like a stock does in the stock market. You should also note the coin’s market cap since that shows you possible long and short-term market trends.

Let’s discuss crypto’s total market cap in greater detail.

What Does the Overall Market Cap Mean?

Sizing up the overall crypto total market cap lets you know about the crypto market in general. You can also look at a single coin’s market cap.

Market cap means market capitalization. If you inquire about crypto’s total market cap, you’re asking about the whole crypto market’s worth. That includes all the crypto forms taken together, including large ones like Ethereum and Bitcoin and smaller ones like Dogecoin.

Crypto’s total market cap now receives a more than $1 trillion valuation. That rises and falls as crypto’s popularity increases and decreases.

What About a Single Coin’s Market Cap?

A single crypto form’s market cap isn’t the total market cap. It means you’re looking at a single coin instead of the whole market.

To calculate a single coin’s market cap, you can use this formula. Calculate the circulating supply x the current price. Something like Bitcoin has over a $400 billion market cap. That’s by far the most valued one. Ethereum sits at around $200 billion. The others fit in somewhere below those two.

Do You Want Higher Total and Individual Market Caps?

Generally, a higher total market cap means people value the crypto market more. If you’re investing in a crypto portfolio or index that a company offers, that’s good news. A higher total market cap means you’re doing well and your crypto investments are up.

If you sell them when the total market cap gets higher, you can make a profit. You can also hold your investments and wait. They might go up even more, though the market may also drop.

As for higher individual coin market caps, those really only help if you hold that particular coin at the time. If you see that Bitcoin Cash went up, for instance, and you have some, you might sell at that moment.

That’s why you should monitor your individual coin’s market cap as it fluctuates. If you’re a day trader with crypto, like with stocks in the stock market, you might identify and leverage trends and make a quick profit.

When Should You Sell Your Crypto?

You might also look at the total crypto market cap value and individual crypto market cap values and wonder when you should sell or trade your currency. In theory, you can just wait till the individual market cap value goes up if you have a single coin. You can wait till the total cap value goes up if you have several coins in a portfolio or index.

See:  The Use of Cryptocurrency in the Fundraising and Venture Capital Industry

However, you might also look at the crypto market in a larger context. The market will often dip or rise from a single world event or economic factor. Something like the war in Ukraine breaking out can shake up the market, like you will see with the stock market. If that happens, you must consider whether you might see a fast market rebound or a slow, gradual one.

If you can afford patience, waiting while the market rebounds makes sense. If you’re antsy, though, you might sell off all your crypto when the market’s total cap value starts sliding.

Usually, investing only works with patience. Like the stock market, the thought prevails with crypto that if you leave your money in these assets for years, you’ll see a profit when you eventually cash out. Maybe that happens after several decades when you retire.

Crypto day trading has the same potential angst that comes with stock market day trading. You might cash in if you pull the trigger at the right time. If you feel you can predict the right moment to sell based on total market cap valuation, you may use that as one of your main determining factors.


NCFA Jan 2018 resize - Breaking Down What Cryptocurrency’s Total Market Cap MeansThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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