What is Market Capitalisation?
The total value of all circulating coins for a cryptocurrency — calculated as current price × circulating supply.
Market capitalisation (market cap) is the most widely used metric to measure the relative size of a cryptocurrency. It represents the total value of all coins currently in circulation.
Formula:
Market Cap = Current Price × Circulating Supply
Example: Bitcoin has a circulating supply of ~19.7 million BTC. At $50,000 per BTC:
Market Cap = $50,000 × 19,700,000 = **$985 billion**
Market cap tiers:
| Tier | Market Cap | Characteristics |
|---|---|---|
| Large cap | $10B+ | BTC, ETH — high liquidity, lower volatility |
| Mid cap | $1B–$10B | Established altcoins — moderate liquidity |
| Small cap | $100M–$1B | Riskier, higher volatility, lower liquidity |
| Micro cap | < $100M | Very high risk, low liquidity, easy to manipulate |
Why market cap matters for traders:
Market cap limitations:
Market cap can be misleading if most supply is locked or controlled by insiders. "Fully diluted market cap" (price × max supply) is sometimes a more useful metric for newer tokens.