Cryptocurrency Market Capitalization
The financial markets are riding high on the competition they face with the different forms of online trading software, automated robots to ease trading and start trading from anywhere on the go, the app version in the mobile devices and smartphones are adding more fierce competition of people pumping more money in the crypto markets.
What is Market Capitalization?
In simple terms, the amount of Fiat currency that is invested in the crypto markets in different coin currency across different, trading platform and the cost they have to pay to buy the bitcoin or Ethereum or other coin currency. The usual confusion of how much the coin currency is worth the fiat currency makes the investors be on the edge every time there is a spike in the crypto of currency. There cannot be a comparison between two currencies in terms of their potential as their prices are based on the demand and supply of the particular currency in the exchanges.
In case of a hypothetical example if the supply of the base currency that has been widely accepted in the crypto exchanges as Bitcoins have a demand of X number of coins. The supply of the Fiat currency invested in the crypto market should be equal or more than X times the Bitcoins so that the increasing demands met in crypto exchanges across the globe.
Determining the market Cap could be a challenging task as the amount of money invested in US dollars or GBP in the cryptocurrency has to be prioritized according to the contribution in fiat currency into other coin currencies. The list of the market cap gives the investors and traders a brief idea about cap outlay in an orderly manner with the percentage of investment.
There are cases when an equal amount of Fiat currency is invested both in a two-coin currency that gives the Flippening effect in the markets, the effect would ultimately be affected in the price of the base coin currency to be higher than the other currency, for example, Ethereum may have a lesser price than Bitcoin. The market cap is a useful indication about the amounts that are weighed in the crypto markets; they are taken as a guide and should be reflective of the price. Using the tools as an indicator of how to trade in the particular coin currency is an effective instrument for investors to understand and cautiously invest in an orderly manner.