Market Cap, or market capitalization, is a term used to describe the value of a company or asset. It is calculated by multiplying the total number of shares outstanding by the current share price. Market cap can also refer to cryptocurrency tokens and coins as well; in this case, it is determined by multiplying the circulating supply of coins by their current price per coin.
The market capitalization (or “market cap”) of any given crypto-asset serves as an indicator for its relative size and provides investors with an accurate picture of its worth compared to other digital assets. Generally speaking, larger market caps are usually associated with more established projects that have been around longer and typically indicate higher liquidity levels than smaller ones.
In addition to providing useful data points regarding how large a particular project may be when compared to others in the industry, this metric also helps investors assess potential risk/reward scenarios when considering investments into certain cryptosystems. For example, if two cryptocurrencies had similar features but one had a much lower market cap than another – then there could be greater upside potential for those investing in the latter due to less competition from larger players entering the space over time.
For more information on market cap metrics and their importance within cryptocurrency markets please consult additional resources such as CoinMarketCap’s “What Is Market Capitalization?” page which offers further insight into what factors influence these values for various digital assets across different exchanges worldwide
