What is Cryptocurrency capitalization?

What is Cryptocurrency capitalization?

What is cryptocurrency capitalization

The concept of capitalization is used to assess the financial condition of the object under study. With the help of this assessment, it is possible to understand how big this or that project is. Few people know, but when compiling Forbes rankings, representatives of the magazine add up the value of all assets of a particular person, and then indicate the amount of his funds.

Therefore, based on this, the following definition can be drawn up:

Cryptocurrency capitalization - is the total value of assets owned by a company, company or person that are currently in circulation. The capitalization of something is always calculated based on market rates. To calculate the capitalization of a company, add up the value of real estate, equipment, vehicles, financial indicators and other assets owned by the company and you will get the amount of its capitalization.

The capitalization of the cryptocurrency market is...

According to the standard definition of the word capitalization, cryptocurrency market capitalization is an indicator that reflects the sum of capitalizations of each blockchain project that has listed its tokens and coins on cryptocurrency exchanges. The more projects, the potentially larger the capitalization of the market as a whole.

In January 2018, the market capitalization peaked at $835 billion. At that moment, the value of digital gold - bitcoin was equal to $17,650 per coin.

How cryptocurrency capitalization is formed

To estimate the capitalization of a cryptocurrency, it is necessary to possess only 2 figures related to it: 

  • The number of coins (tokens) in circulation; 
  • The market rate of the coin (token). 

By multiplying these 2 numbers with each other, you will get the total capitalization of the cryptocurrency at the moment.

For example: 

At the time of writing, there are 17,090,762 BTC in circulation. 

The Bitcoin exchange rate is $6,463.23. 

By multiplying these two numbers, we get - $110,461,525,681.

Based on this, you should understand that a change in the price of a cryptocurrency in any one direction is reflected in its capitalization. Similarly, if the number of coins in circulation increases, the amount of capitalization also increases by the value of the number of coins.

Cryptocurrency monitoring

For convenient monitoring of changes in the market capitalization of digital currencies, all coins and tokens are combined into a list, which based on the received data (coin rate and their number) forms them into a rating. At the moment, according to CoinMarketCap, 2,168 cryptocurrencies are launched or are in the process of launching. 

This rating, like any other, has its own TOP. When monitoring blockchain projects market it is accepted to separate top 100 coins by capitalization. Bitcoin is a perfect leader of this list, followed by Ethereum and Ripple that change positions from time to time.

Conclusion

Friends, this is all the information you need to understand what cryptocurrency capitalization is, how it is formed and what affects it.

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