What is Market Capitalization?

In cryptocurrency trading, market capitalization or market cap is the aggregate valuation of a digital currency based on its current value multiplied by the number of units that are currently in circulation. Basically it is the current price of the coin multiplied by the number of coins created. For example, if a specific digital coin has 5,000 circulating units and has a value of $10 for each coin then its market cap is $50,000.

Many cryptocurrency traders compare different digital assets based on market cap as this is considered to be an important indicator of the asset’s economic stability. Alternatively, you may also use other metrics to compare these different digital currencies and track their total valuation.

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