The cryptocurrency market opens enormous earning options for traders and investors. To succeed in crypto trading, one should know how and when to use different trading methods, be skillful in using trading tools, and be able to analyze the market and identify promising projects. The cryptocurrency market involves different indicators that help traders evaluate the present state and prospects of this or that crypto asset. And one of the crucial figures every trader pays attention to is the crypto market cap.
The popular Coinmarketcap resource offers a list of cryptocurrencies by market cap. Why is it so important, and what does it mean? Let’s try to figure it out.
Why Does the Cryptocurrency Market Cap Matter?
Market capitalisation is an indicator showing the total value of all the coins circulating in the market. That means a particular crypto asset’s total value, calculated by multiplying the current price by the number of coins released (mined). Therefore, the more coins in circulation and the higher the price, the bigger the market cap. There are coins with large capitalisation, middle, and small. Here are the assets with the largest cap (exceeding $100 billion):
- Binance USD
- and others.
Small-cap crypto assets are those with a market cap lower than $500 million. There is a sense of buying mid and small-cap coins because they have room for growth. For example, it would be difficult to double the market cap for such a crypto giant as Bitcoin, but such crypto as Polygon, Filecoin, and Aave have much bigger growth potential.
That is the reason why it is worth considering middle and small-market cap projects.
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