What is Market Capitalization in Simple Words? | Learn

When searching for investment opportunities, many people first consider the price tag of an asset. However, there's another element that could reveal much more about its true value: market capitalization, often referred to simply as 'market cap.'

Understanding market cap is important as it offers insights into the overall scale and significance of an investment, making it easier for beginners to navigate their investment choices. This measure plays an important role for investors, providing a clear snapshot of an entity's size compared to others in the market.

What is Market Capitalization?

Market capitalization, often abbreviated as 'market cap,' is a financial metric calculated by multiplying the current price of a crypto asset by the total number in circulation. For instance, if a crypto asset has a circulating supply of 20 million coins each priced at $50, its market cap would be $1 billion. This metric is an effective way to measure the overall market value of an asset, providing a baseline for comparison across different investment options.

Types of Market Capitalization

Market capitalization can be categorized into three main groups: large-cap, mid-cap, and small-cap.

Large-Cap: Crypto assets with a market capitalization of $10 billion or more are classified as large-cap. Known for their stability and established track records, these assets are considered “safer” investments and can offer steady growth.
Mid-Cap: Crypto assets with a market cap between $1 billion and $10 billion fall into this category. Mid-cap assets can provide a balance, offering potential growth while maintaining more stability than smaller-cap cryptocurrencies.
Small-Cap: These crypto assets have a market capitalization of less than $1 billion and tend to be more volatile. Despite the higher risk, they attract investors looking for potential growth opportunities that could result from rapid price movements.

Discovering Market Capitalization: Tools and Opportunities

In summary, understanding market capitalization is important for anyone involved in crypto and overall investing. To better understand market capitalization for crypto assets, iTrustCapital offers a markets page where investors can check current crypto prices and their market cap. Lately, many investors have recognized the benefits of buying and selling crypto in a tax-advantaged IRA. Learn more below on why investors are choosing this method.

Top 5 reasons to open a Crypto IRA at iTrustCapital

Open an account today to start buying and selling crypto in a tax-advantaged IRA.

DISCLAIMER

This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.

iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.

Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.

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