A Complete Guide of a Crypto Market Capitalization

7 min read
20 October 2023

Cryptocurrency market cap is the monetary value of a token or coin multiplied by its circulating supply (the number of coins/tokens that have been mined or minted). It emphasizes the stability and value of an asset over the long term.

While there is no denying that cryptocurrencies are volatile, cryptocurrencies with  large market capitalizations often represent more stable investments, as cryptocurrencies with smaller capitalizations are more sensitive to general psychology of the market.

Let's learn more about market capitalization for cryptocurrency and why it matters in your crypto journey.

Why is market capitalization important in cryptocurrency?

In the cryptocurrency market,  price alone can be a misleading indicator in determining a project's  potential and true value. Even the largest-cap cryptocurrency, Bitcoin, can skyrocket or decline significantly depending on factors such as public enthusiasm, rapid changes in circulating supply, or even is a country that bans cryptocurrencies.

Such events often impact the overall picture of a cryptocurrency's ultimate potential.

What savvy crypto investors want to see is a coin or token that has a relatively low supply but  high value. That said, cryptocurrency investors use  market capitalization as an essential indicator to compare the value of cryptocurrencies and determine their growth potential. In general, assets with higher market capitalizations often make investors  more willing to pay for them.

For example, when crypto enthusiasts refer to the total cryptocurrency supply, they sometimes use the term fully diluted value (FDV). Fully diluted market capitalization is calculated based on the value of all  coins of a cryptocurrency, not just those in circulation. One of the reasons Bitcoin (BTC) continues to do well is because its fully diluted supply is only 21 million. Currently, over a million of these coins are still being mined, with a total circulating BTC supply of over 19 million.  

How is the market capitalization of cryptocurrency calculated?

Just as you calculate the market capitalization of a stock by multiplying the current share price by the number of shares outstanding, you calculate the market capitalization of a cryptocurrency by multiplying the  current market price of the coin /of the token with its circulating supply.

For example, to manually get the current market capitalization of Cardano (ADA), we calculate the following:

  • Current circulating Cardano supply is 35,045,020,830 at $0.279 (at time of  writing)
  • Multiply 35,045,020,830 chips by 0.279 USD.
  • ADA's market capitalization is 9,768,165,285 USD (about 9.8 billion USD).

However, BitNasdaq can help you to get a complete calculated map of the market capitalization of a cryptocurrencies in a simpler way.

Identify the best cryptocurrencies by market capitalization

The term “market capitalization” is often used to determine the best cryptocurrency exchange in india to buy. Cryptocurrencies with  larger market capitalizations are considered desirable by investors. Since the emergence of cryptocurrency in 2009, Bitcoin has remained at the top in terms of market capitalization.

In November 2021, Bitcoin reached its highest market capitalization of $1.23 trillion when 1 BTC traded at $69,044. The increase in market capitalization is 10 times larger than the same period in 2013, when Bitcoin's market capitalization was about $1.2 billion. Such an increase indicates growth in a coin's ecosystem, further fueled by a decrease in the available money supply.

Ethereum is another top cryptocurrency that has been in second place for a long time. At its highest price of $4,878 in November 2021, Ethereum's market capitalization was $571.67 billion. This represents a significant increase from $80.34 million in 2015, when ETH price was at an all-time low (ATL) of $0.43. The Ethereum ecosystem has grown significantly over the years, leading to an incredible increase in its market capitalization. Tether (USDT), another top cryptocurrency by market capitalization, is the leading stablecoin. USDT has remained among the top three cryptocurrencies by market capitalization for  some time. Interestingly, despite  Tether's trading volume plummeting due to the ongoing bear market, its market capitalization almost reached an all-time high of $83 billion in June 2023.

Cryptocurrency classification

In terms of market capitalization, cryptocurrencies are classified into three categories:

large-cap, mid-cap and small-cap cryptocurrencies. Let's take a look at these categories and some of their cryptocurrencies. 


Large-cap cryptocurrencies are cryptocurrencies that typically have a market capitalization above $10 billion. These cryptocurrencies account for the majority of the  market capitalization of cryptocurrencies. For those accustomed to investing in the regular stock market, buying large-cap cryptocurrencies is like buying blue-chip stocks.

Considered the leading cryptocurrencies, these cryptocurrencies include Bitcoin, Ethereum, Tether, Ripple (XRP), and BNB Coin (BNB). A newcomer to the large-cap bandwagon in 2023 is Lido Staked Ether (stETH).


Mid-sized cryptocurrencies have market capitalizations between $1 billion and $10 billion. Most of the cryptocurrencies in this category are frequently on the move (existing on the market for less than 5 years), creating very innovative products, especially in the DeFi segment.

Notable newcomers that entered the category shortly after launching in 2023 were Arbitrum and Aptos. Avalanche, Uniswap, Polkadot, and Chainlink are some others that have been around for a while. Although they are still quite volatile and risky, they can give you  good returns if you get in early.  


Small-cap cryptocurrencies have a market capitalization below the billion dollar mark. They are very risky, but some offer huge profit potential. Unfortunately, these are considered the most unstable cryptocurrencies, and many of them have a history of scams.

Some crypto influencers are strong advocates of getting into small-cap cryptocurrencies before their market capitalization explodes. After all, every large-cap cryptocurrency started out as a small-cap cryptocurrency at some point. A proper investment strategy always includes researching the growth potential of a project, and monitoring  market capitalization and project classification is an indispensable part. Other metrics to consider in-depth include the coin's encryption system, project team, and other variables before purchasing.

Compare cryptocurrency values

Since market capitalization fluctuates based on the price of a cryptocurrency, receiving up-to-the-minute updates is essential. Most cryptocurrency aggregators and exchanges provide  real-time updates on the market capitalization, price, and circulating supply of an asset.

Taking market capitalization into account is characteristic of more sophisticated investors.

 Market cap weighted strategy for cryptocurrencies

For investors looking to add another element to their investment strategy, market capitalization weighted valuations can be useful. For example, (using small numbers for ease of calculation), if the market capitalization of Cryptocurrency A is 20 USD and the market capitalization of Cryptocurrency B is 80 USD, then the sum of the two market capitalizations is 100 USD. 

What factors can have an impact on market capitalization?

The main factors affecting market capitalization are supply and price. Rising prices lead to a significant increase in market capitalization. However, with supply still part of the equation,  investors have a clearer idea of ​​the future of any cryptocurrency when they avoid temporary price excitement  and look at the data Market capitalization. BitNasdaq also guides you in data market capitalization.

Read more about:

How to Sell Bitcoin Instantly 

Crypto P2P Trading


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