There are many experts that use term market cap while evaluating growth of this crypto industry. You might hear this term as criterion used for ranking cryptocurrency networks.
What’s crypto market capitalization?
Knowing or defi market capitalization can help you to trace the development & prominence in this market. It will help you to make the most effective investment choice in today’s crypto sector. The crypto market cap is one important metric, such as Technical Analysis and Fundamental Analysis, in the most conventional stock market.
Why’s Bitcoin market cap so important?
Bitcoin market cap offers the good indicator on how the investors view the Bitcoin. Suppose the market cap keeps on increasing, that means Bitcoin will be viewed in the favorable light & people are quite a bullish about the future. If Bitcoin market cap falls that mean people are a bit worried about the Bitcoin’s future & are exiting the investments from this currency.
Market caps of the digital coins will provide a very good indication on how resistant this coin is to the volatility. People with the small market caps generally tend to be highly affected by the big news stories and large traders that take the position. Suppose many large traders sell, the coin with small market cap will be decimated.
What’s total crypto market cap?
The market capitalization depicts the real value of the Bitcoin, stablecoins, altcoins, tokens, or other important crypto assets combined. The metric will be deemed very important by a lot of people, since it indicates size of this industry. Because of the high volatility of this market, values generally tend to shift over quite a little. During these first six & half years of cryptocurrency existence, total market cap did not surpass $20 billion. As the recent peak at over $770 billion, it is fluctuating in billions.
One last way to consider the Bitcoin’s intrinsic value will be viewing it as the produced commodity, just like silver and oil. Most of the commodity prices will be driven by the marginal cost of the production, or producers cost to make an additional unit. The economic theory states in the market where a lot of producers of same product are competing with each other to sell the product to consumers, the process of competition may drive down its selling price to the marginal cost.