💰 What is capitalization?
In simple words about the complex
Have you heard about small cap violas and that’s all?
Crypto investors constantly talk about the capitalization of the crypto market or specific coins. What does this even mean?
Brief and accessible:
Capitalization is the total value of the entire crypto asset, or the answer to the secret question “how much money is there in this project?”
It is calculated as follows: we multiply the number of coins by the current market price.
There are some nuances here, which are related to the fact that not all of the specified coins are already in circulation (cue ball is still being mined, for example). But we will omit them, for now the general formula will suffice.
Why do we need to know this?
The larger the cap, the more stable the cryptocurrency.
The smaller the cap, the greater the risk and the stronger the wow effect when the coin flies up to x100.