The market cap of crypto, including Bitcoin, touched a high of USD 2 trillion in early April 2021. Then, what is the market cap?
As the attractiveness of people to investing in crypto assets has increased. Thus, the asset market cap also recorded fantastic numbers.
For the first time in history, the asset market cap reached USD 2 trillion. This is of course dominated by Bitcoin, “The King of Crypto” with a market cap of USD 1.1 trillion.
Wow…. Then, what is it? And how is the investment interest of people in Indonesia?
What is the Market Cap?
The meaning of the market cap for bitcoin and other assets is very similar to the market cap in stocks. If, you are familiar with the stock market cap, then it is easy for you to understand the explanation of this for bitcoin and other crypto assets.
Market capitalization or what is commonly referred to as market cap is a measure that shows the value of an asset to compare an asset with other assets.
If in stocks, the market cap measures the value of a security against other securities or one issuer against other issuers. Typically, the calculation is by multiplying the number of shares outstanding and the share price.
Not much different, the Bitcoin and crypto assets is the same. However, the way to calculate it is the current asset price and the number of assets in circulation.
Market Cap is So Important in Trading
The market cap is very important in crypto trading. Because seeing the market cap is an analysis in trading. If an asset has a high market cap, it is difficult for the asset to wildly speculate on prices.
So, it can be concluded, the safest crypto assets today are Bitcoin and Ethereum. Because these two cryptos are the largest market caps.
If you want to buy an altcoin, other than Bitcoin and Ethereum, you can see it. Avoid cryptos that have a small market cap. Such assets could be price speculators.
How to Check
To check the market cap of a crypto asset, you can access www.coinmarketcap.com. The web displays thousands of crypto assets around the world.
You can type in the search field, if you want to see the market cap of a crypto. The site also does not only display the market cap. However, there are also transaction volumes, price movements, and other complete information and data.
Is it Wrong to Buy Crypto with a Low Market Cap?
Are you justified in buying crypto with a low market cap? Actually, that’s fine. As long as you are sure the price will increase again at a later date.
Also, make sure you have done fundamental analysis or technical analysis before buying crypto assets. So that later, you don’t buy the wrong one and continue to make a profit.
One way to do analysis is by watching interesting content on Indodax, its academy and Indodax’s official social media.