Market Cap

What is market capitalization or market cap? That is a question many people ask when they read about cryptocurrencies. Market cap or crypto market cap is the aggregate value assigned by the market of a company. It is usually represented by the dollar. The market cap represents the market value of a company.

To make market cap easier to get, think of it as the net worth of a company based on current market prices of their shares and the total number of shares. We refer to it as a market cap where the cap is the short form of capitalization.

This is a financial term used to show us the size of a company.

Market cap is the total value in dollars a company owns. We use the market cap to estimate the size of corporations as accurately as possible. The calculation of the crypto market cap allows us to understand what the market value is, in aggregate.

The best way to get information about how the cryptocurrency market capitalization is doing, we use reliable cryptocurrency news sources.

How We Calculate Market Cap?

We calculate market cap by multiplying the shares of a company by the current price of each share. The market cap of cryptocurrencies is a calculation of the number of coins mined so far by the dollar value of each coin.

So, to get the crypto market cap, we assume that the company’s shares are represented by X number of shares. When you multiply X by the price of each share, you get the value of the company and that is what we call the market cap.

The crypto market cap of various coins is important. We will look at some major market capitalization of the biggest coins to determine how well these coins are doing.

• Bitcoin

This is the first-ever cryptocurrency. Created in 2008, it sparked interest and to this day, stays at the top of the charts in terms of market cap and market share. No one knows who created it. It is decentralized, digital and like all crypto coins, built on the blockchain. It is the top in the crypto market cap because it is the oldest one with a larger community. It is supported by a large group of people and is easy to buy.

It is now making its way into the mainstream with Microsoft, Overstock.com, and Expedia.com among others accepting payment in BTC. It has a market cap of $163 billion and 36% of the market share, making it the biggest in history.

• Ethereum

The Ether is the second most valuable cryptocurrency after Bitcoin in terms of market cap. Vitalik Buterin created it in 2015. It goes above and beyond by being more than just a cryptocurrency. It is also a platform that developers use to create decentralized apps and smart contracts. The Ether is the native currency and original purpose of Ethereum. It forms a huge chunk of the market capitalization valuation.

It is also a great platform for launching ICOs (Initial Coin Offerings) for other blockchain projects. They have a transaction speed that lasts seconds, which is fast compared to Bitcoin’s 10 minutes. This will lead to a rise in the crypto market cap of the Ether. Ethereum has just one coding language (Solidity) which is a barrier for developers who want to enter.

The prices for Ethereum have been more stable than bitcoin. They crash but they do so steadily. With a market capitalization of $77.5 billion, it is second only to bitcoin.

• Ripple (XRP)

Ripple is a cryptocurrency created for solving the problems of just one industry; The International Payment Transfers. It is the PayPal of cryptocurrencies and towers over most cryptocurrencies in terms of market cap. Founded in 2012, it is all about making the transfers safe, cheap and fast. There are 100 billion XRP and half of them belong to the company that created Ripple.

From the solutions it offers, the crypto market cap of Ripple has grown to billions.

Ripple makes transfers internationally in seconds. Fees are lower and it is for just one use (international money transfers). It is one of the few crypto coins being tested out in the real world, which explains why the crypto market capitalization of this coin has grown so rapidly.

Because they own half the coins, they face criticism for being centralized when the whole idea behind blockchains is that we decentralize them. It is the third most valuable currency with a market cap of $34.12 billion.

• Litecoin

Litecoin is the creation of a former Google employee named Charles Lee. We built it on the blockchain of bitcoin itself to improve Bitcoin and the crypto market cap shows it has grown big.  Like bitcoin, it is a digital currency and does not have a platform for smart contracts.

As a cryptocurrency, it has stood the test of time by being in the market for over 7 years without dying out. The transactions on Litecoin take about 2.5 minutes to complete when compared to the 10 minutes that it takes to complete a Bitcoin transaction.

The transfer fees of Litecoin are about $0.179 when compared to Bitcoin’s $1.8. More people like it and that has helped the market capitalization of this coin soar.

It is one of the most withstanding currencies that has a market cap of $9.64 billion. Since the market crash of crypto in March 2018, Litecoin has dipped just like every cryptocurrency but it holds firm.

• Bitcoin Cash (BCH)

Do you remember the hard fork from Bitcoin which took a big bite out of the crypto market cap of Bitcoin? It gave birth to Bitcoin Cash. Bitcoin kept the original features, but the child Bitcoin produced, underwent some tech changes.

The purpose of creating BCH was to make sure that they would solve some problems Bitcoin faces. The problems come from scalability and transaction fees. Bitcoin Cash has faster transactions that are better than Bitcoin because the block size in BCH is 8MB and the one in Bitcoin is 1MB.

The average transaction fees are about $1.8 for Bitcoin while the one for BCH is $0.067. It was launched in 2016 and has grown quickly from $500 in July 2017 to about $4000 in December the same year. The market capitalization of BCH is $3.7 billion.

As you will find out, most of the coins with the large market caps are the ones that make the most ripples for cryptocurrency news. Check them out before you invest in any of them to see how big they are in the market and how they are doing.