Market capitalization, also known as market cap or Mcap, is an easy way to see how much a cryptocurrency or company is worth on the open market. Market cap totals the value of all units of an asset that are currently available. For coins and tokens, this means counting the tokens people can buy or sell now and multiplying that by the token’s market price. Investors use this single number to compare the size of different assets.

How it is calculated

To find market capitalization, multiply the number of units in circulation by the current price per unit. For example, if there are 10,000,000 tokens and each is worth three dollars, the market cap is 30,000,000 dollars. This method works the same for stocks and crypto, with the main difference being how circulating supply is defined.

Common market-cap categories

People often sort assets by market cap to show their size and usual behavior. In crypto and sometimes in stocks, the categories are usually:

• Large-cap: widely known assets, often the top 10 by market cap, generally $10 billion or more.
• Mid-cap: growing projects usually between $1 billion and $10 billion.
• Small-cap: assets typically under $1 billion, often newer or less widely used.

These ranges are just guidelines, not strict rules, and different sources might use slightly different names.

Why people look at market cap

Investors look at market cap because it quickly shows how big an asset is. A bigger market cap often means the asset is more established and less likely to have big price swings. A smaller market cap can mean more growth potential, but also more risk. Traders also consider market cap along with other factors like trading volume and liquidity to get a better overall view.

Things market cap does not show

Market capitalization does not show how easy it is to buy or sell the asset at that price, and it does not predict future use or popularity. It can also be misleading if many tokens are locked up, held by founders, or not really available to the public. In short, market cap is just one number and should be used with other information when making decisions.

Variations and edge cases

Different projects and exchanges may report supply in different ways. Some count all tokens ever made, while others count only those in circulation. Projects can also burn or create new tokens over time. Prices can vary between exchanges, so market cap numbers can change depending on which price is used. That is why websites that show market caps usually explain what they include in their supply and price numbers.

Practical example

If a coin has 5 million coins in circulation and each is worth two dollars, the market cap is 10 million dollars. This single number makes it easy to compare that coin to another coin or even to a company, but you should also look at other metrics.