DeutschIn the case of a cryptocurrency, market capitalization – or internationally, market cap – refers to the total value of all coins created to date. It is calculated by multiplying the coin supply (circulating supply) by the current price per coin. So far, Bitcoin, as the leading digital currency, occupies first place in terms of market capitalization.
Why is Market Capitalization Important?
The market capitalization of a cryptocurrency is an important indicator of its popularity. It also indicates how much money is invested in a digital currency and is therefore also important for investors. The higher the market capitalization of a cryptocurrency, the less volatile it should normally be. However, the potential for profit is all the higher the lower the market capitalization. So when people talk about the largest cryptocurrency, they are primarily referring to the coin’s market capitalization. The scenario in which Ethereum’s market capitalization exceeds that of Bitcoin is referred to as the flippening.
