What Does the New Cryptocurrency Market Cap Mean for You?

Top on this week’s cryptocurrency newsfeed was “Cryptocurrency retakes 2T dollars market cap”. After doing some further reading, I saw that the 2T was an approximation of $2,013,576,749,569. The global market cap for cryptocurrency has witnessed a 2.15% increase over the last couple of days. What do these numbers mean for the blockchain industry, and most importantly, what does it mean for you?

To start with, let’s take a look at what a “market cap” means. Market cap is short for market capitalization and it can be defined as the total value of all the coins that have been mined for a cryptocurrency e.g Bitcoin, Ethereum, etc. This value is calculated by multiplying the number of coins in circulation by the current market price of a single coin. In simple terms, market cap = total number of coins in circulation * current market price of a single coin at a given time.

Market cap as a term is not one that is original to the blockchain industry. Instead, it is used in the conventional financial industry to refer to the total dollar value of all the shares of a company’s stock. In the case of cryptocurrencies, it refers to the value of all the coins that have been mined. To understand market capitalization better, let us consider the circulating supply market cap and the fully diluted supply market cap. For Bitcoin, for example, these two metrics are 18.5 and 21 million respectively. The Circulating Supply Market Cap is the value of Bitcoin that has been mined, while the Fully Diluted Market Cap is the value of Bitcoin that will eventually be mined. Observers use either of the two metrics to express the market cap of a cryptocurrency. From the aforementioned, it can be deduced that the 2T dollars figure which was referenced at the beginning of the article is the combined market cap value for all cryptocurrencies currently available.

What then is the importance of the market cap? Price is one way to deduce the value of a cryptocurrency, when you open your crypto app, the first thing you look for is the price of the cryptocurrency you are “hodling” or trading. The question then is, does the price of a cryptocurrency tell you all you need to know? That’s where the market cap comes in as it tells a complete story that goes beyond just the value of the cryptocurrency and from the market cap of a cryptocurrency, you can make informed investment decisions.

As the combined market capitalization of cryptocurrency has reached $2T, it means cryptocurrencies will be less volatile. By and by, this results in the improved stability of cryptocurrency investments. If you are already invested in cryptocurrency, it is time for you to sit back and check how to grow your investments. If you are a novice, then it is time for you to dive in (with the wisdom of course). And, that’s why we are here to hold your hands on this exciting new adventure. Diagon has created two newsletters Diagonal and A Newbie’s Guide to Understanding Cryptocurrency (#ANGTUC) to crypto education in everyday language. You can sign up on Diagon here to start receiving our newsletters straight to your email.

Curious about what exactly Diagon is? Visit www.diagon.io to start playing our fun array of hyper-casual play-to-earn games.

Crypto Term of the Week:

Market cap.

Like what you’ve read? Share with your friends and follow us on social media.

--

--

--

A hyper-casual play-to-earn platform that gives you the best digital living experience with crypto.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Nexo Enhances Multi-chain Offering with Avalanche (AVAX) Listing

Fitting the bill: The US Congress is considering e-cash as a possible replacement for CBDC

Fitting the bill: The US Congress is considering e-cash as a possible replacement for CBDC

06/05 Market outlook, where does Crypto go from here?

VALK X Decentralized Club Ama Recap From the 5th of may

GAUGECASH Integrates Chainlink Keepers to Decentralize Automation of Novel Liquidity Pool…

Demystifying multisig

Learning Crypto #9: Scaling Solutions Part 1

Bitcoin went slightly up amid the Fed’s decision to raise the key rate

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Diagon

Diagon

A hyper-casual play-to-earn platform that gives you the best digital living experience with crypto.

More from Medium

How to survive an NFT winter

Top 3 NFT projects to pay attention to in 2022.

What does the future of metaverse casino gaming look like?

Create your own NFT Marketplace on Polkadot Blockchain with Trending Features