Market capitalization (or market cap) is the overall dollar value of all the shares of a company’s stock– or, in the case of Bitcoin or another cryptocurrency, of all the coins that have actually been mined. In crypto, market cap is calculated by increasing the total number of coins that have actually been mined by the price of a single coin at any provided time.

One method to think of market cap is as a rough gauge for how stable a possession is most likely to be. (It’s important to keep in mind that even Bitcoin, crypto’s most significant market cap, still sees volatility.) But the same way a bigger ship can securely navigate heavy weather, a cryptocurrency with a much bigger market cap is more likely to be a more stable financial investment than one with a much smaller market cap. Alternatively digital currencies with smaller market caps are more prone to the impulses of the market– and can see huge gains or remarkable losses in their wake.

From Bitcoin and Ethereum to Dogecoin and Tether, there are countless different cryptocurrencies, which can make it overwhelming when you’re very first getting started worldwide of crypto. To help you get your bearings, these are the top 10 cryptocurrencies based upon their market capitalization, or the total value of all of the coins currently in circulation.

Price is simply one method to measure a cryptocurrency’s value. Investors use market cap to inform a more total story and compare value across cryptocurrencies. As a key figure, it can show the growth potential of a cryptocurrency and whether it is safe to purchase, compared to others. For a cryptocurrency like Bitcoin, market capitalization (or market cap) is the overall value of all the coins that have been mined. It’s calculated by increasing the number of coins in circulation by the current market value of a single coin.

5 years ago, if you wanted to explore the state of the cryptocurrencies market, the first concern you would ask would most probably be about the cost of Bitcoin. Although having currently lost much of its synonymity with crypto and blockchain technology in general, Bitcoin was still regarded as the essential industry anchor and the most reputable sign of what was to come.

Terra is a blockchain payment platform for stablecoins that relies on keeping a balance in between 2 kinds of cryptocurrencies. Terra-backed stablecoins, such as TerraUSD, are connected to the value of physical currencies. Their counterweight, Luna, powers the Terra platform and is used to mint more Terra stablecoins.

Determining the stock exchange’s capitalization is normally done by multiplying the last cost of the stock trading by the total number of stocks in public flow. In ติดดอยดอทคอม of ‘traditional shares’, the value of shares is backed by financial fundamentals such as overall assets (liquid assets, concrete assets and intangibles) and predicted future cash flows. As a result, conventional stock rates and overall capitalization value are pretty reflective of the general state of a company. With crypto, this relationship is more ambiguous. Cryptocurrencies have no liquid assets, no concrete assets, and really limited intangible ones that can back and validate their present cost and market capitalization.

Terra stablecoins and Luna operate in concert according to provide and demand: When a stablecoin’s price rises above its tied currency’s value, users are incentivized to burn their Luna to produce more of that Terra stablecoin. Also, when its value falls compared to its base currency, this encourages users to burn their Terra stablecoins to mint more Luna. As adoption of the Terra platforms grows, so too does the value of Luna.

RELATED ARTICLESMORE FROM AUTHOR