BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
FOLLOW
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result

Understanding Market Capitalization

BlockNews Team by BlockNews Team
August 10, 2022
in Business, Crypto
Understanding Market Capitalization
Share on TwitterShare on Reddit

Seeing comments like “DOGE to $100” on forums or youtube comments makes one realize that sometimes, people genuinely do not have a solid understanding of the market cap of a particular asset. 

Today we explore what a market cap is, why it is essential to understand how it affects prices, and explains why Shiba Inu, Dogelon Mars, SafeMoon, or any of your favorite meme coins will probably never reach $1. 

Ok, so… what is market capitalization?

To put it simply, “market cap” is the amount of money invested collectively in a particular asset. It is a term commonly used in stocks and commodities for years and crossed over to crypto naturally. 

We can calculate it by multiplying the coin’s price by the total amount of coins in existence. For example, it is well known that Bitcoin has a fixed supply of 21 million coins. The current price of about 20k per 1 BTC would imply a 420 billion market cap if all 21 were mined. ADA, the native currency of the Cardano ecosystem, has about 2143 times as much total supply (45 billion coins).

That means it would only take ADA to reach about 13 dollars for both of them to have an equal market cap. 

This has been a topic of discussion for many years. It is worth noting that no coin has ever, in the entire history of cryptocurrencies, surpassed Bitcoin in its market cap, and many thus view it as “the barrier” that dictates how far a certain altcoin could rise. Some propose that Ethereum will eventually gather enough momentum and take the number one spot in an event termed “The Flippening.” 

When deciding whether or not to invest in a coin, its price alone should be the least of your concerns. It would be much wiser to ignore the current price of the coin you want to invest in altogether and look at its market cap. 

It is a fallacy to assume that just because a particular coin has a low price in terms of dollar amount, it also has, for some reason, a higher potential for growth.

So to conclude, the notion of your favorite meme coin skyrocketing to $1 and making you a millionaire is improbable. If, for example, Shiba Inu would by some miracle reach $1, that would mean its market cap is now 6.5 trillion.

To put this into perspective, this is 3x more than the entirety of all crypto coins.

Tags: Bitcoincryptomarket cap
TweetShareShare

DON'T MISS THESE! HOT OFF THE PRESS

Nasdaq Billboard in times square
Crypto

SEC Extends Deadline for ARK 21Shares Spot Bitcoin ETF Decision to January

September 28, 2023
HTX Logo
Business

HTX Records $7.9 Million Loss, Implores Hackers to Return Stolen Funds

September 28, 2023
Eth Logo overlooking Earth
Business

Celo Considers Transition to Ethereum Layer 2 Via Polygon Chain

September 28, 2023
Kucoin Logo with Digital Background
Business

KuCoin Crypto Exchange Breaks 30M Users as the Exchange Celebrates its 6th Anniversary

September 28, 2023
Binance Logo with Red Market Charts
Business

Binance Fully Exits Russia, Sells Business to CommEX

September 28, 2023
Bitcoin Ordinals Text with some NFTs on top
Crypto

Bitcoin Ordinals Visionary Proposes Fresh Token Protocol as BRC-20 Alternative

September 28, 2023
Load More
Next Post
Starbucks Is Brewing Something Up In Web3

Starbucks Is Brewing Something Up In Web3

Blackrock: Bitcoin and Beyond

Blackrock: Bitcoin and Beyond

Another Hack: Beanstalk Farms Suffers a $182 Million Breach

Another Hack: Beanstalk Farms Suffers a $182 Million Breach

Related News

ConsenSys Plans to Launch Sustainable Green NFTs to Celebrate the Merge

ConsenSys Releases New Layer 2 Scaling Solution Linea

September 28, 2023
chipmixer

The Takedown of ChipMixer: A Turning Point in the Battle Against Crypto Laundering

March 17, 2023
Jamaica Crypto

Jamaican Taxi Drivers Set to Go Digital with Drivers Bullish on Accepting Jam-Dex CBDC

September 4, 2023

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Featured
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
Discord Twitter Instagram TikTok
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Featured
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • SEC Extends Deadline for ARK 21Shares Spot Bitcoin ETF Decision to January September 28, 2023
  • HTX Records $7.9 Million Loss, Implores Hackers to Return Stolen Funds September 28, 2023
  • Celo Considers Transition to Ethereum Layer 2 Via Polygon Chain September 28, 2023

© 2022-2023 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022-2023 BlockNews.com - Crypto and NFT news website by JRNY Club.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?