Читать книгу Cryptocurrency All-in-One For Dummies - Peter Kent, Kiana Danial - Страница 69

One of the fastest ways to navigate through popular cryptocurrencies is to check out their ranking based on their market capitalization, or market cap. Traditionally, market cap is the value of a company that’s traded on the stock market. You can calculate it by multiplying the total number of shares by the present share price.

In the cryptoworld, market capitalization shows the value of all units of a specific cryptocurrency that are for sale right now. To calculate a cryptocurrency’s market cap, simply multiply the cryptocurrency’s current price by its circulating supply. Circulating supply is the best approximate number of coins that are circulating in the market and in the general public’s hands.

Market cap = Price × Circulating supply

Knowing about a crypto’s market cap and its ranking versus other coins is important because that information can quickly show you how popular the coin is and how much money you may be able to make from it. You can find out about all cryptocurrencies’ market caps by visiting websites such as http://coinmarketcap.com, www.cryptocompare.com/, https://coincodex.com/, and www.coingecko.com/.

Market cap can’t tell you everything about a cryptocurrency’s investment potential. Lots of other factors, such as forks, regulation, rumor, and so on, can affect a cryptocurrency’s value. See Book 5, Chapter 4 to find out more about analyzing a cryptocurrency’s performance.

A higher market cap isn’t necessarily a good thing. Investors who can take higher risks may prefer cryptocurrencies with a lower market cap because those may offer more room for the market cap to increase. However, if you want to play it safe and avoid volatility or vanishing risk, you may prefer going with cryptocurrencies with a higher market cap. See Book 5, Chapter 2 for more.

With a knowledge of what role a coin’s market cap plays in the industry, you can start to evaluate cryptocurrencies based on that metric.