“Universal Formula: The current value of coin x Current supply = Total crypto market cap” - Universal Formula

What Is Market Capitalization?

It is frequently used to compare and gauge the relative size of businesses in a certain industry. A firm's market capitalization, which reflects the total value of its outstanding shares and is used to analyse whether a company is overpriced, undervalued, or appropriately valued, is another important aspect in evaluating its success. Additionally, it is used to compare businesses both within and across industries, as well as within the same sector.

This indicator is used by investors to assess the relative sizes of firms and evaluate their respective risk and performance. Finally, it aids investors in comprehending the stock's overall liquidity and trading volume.

A large-cap firm is typically referred to as one that has a market capitalization (the sum of the value of all the shares it has issued) of $10 billion or more. These businesses often have a robust balance sheet, a lengthy history of success, and a well-established market presence. Large-cap corporations include, among others, ExxonMobil, Apple, Microsoft, Walmart, and Johnson & Johnson.

It is significant to remember that the precise rankings that organisations receive can differ from one index source to another. How do the businesses compare?

• Mega-capitalization: the market value of a business starts at $200 billion.

• Large capitalization: market value ranges from $10 billion to $200 billion.

• Mid-capitalization: market values start at $2bn and end at $10 billion.

• Small capitalization: market values range from $250 million to $2 billion.

• Micro-capitalization: market value of less than $250 million.

As a result, while stock price should be taken into account when assessing a company, it should not be the sole one. To make an educated investment selection, it's crucial to take into account additional measures including market capitalization, earnings, debt, and other financial metrics. Investors should understand that a stock's worth is based on more than just the share price per unit; it also depends on the company's overall financial condition.

What is the crypto market cap?

The market capitalization of a cryptocurrency represents the overall value of that currency. It is computed by dividing the quantity of coins in circulation by the price of a single coin at the time. This offers you a decent notion of the size and level of liquidity of the bitcoin market. It also offers information on the state of the entire market for digital currencies.

Cryptocurrencies with a market capitalization of $20 billion or more are considered mega-capitalization coins. Examples of cryptocurrencies with enormous capitalizations include Bitcoin and Ethereum.

• Large-capitalization cryptocurrencies have market capitalizations between $2 billion and $20 billion. Examples of large-capitalization cryptocurrencies include Litecoin, Cardano, and Polkadot.

• Mid-capitalization cryptocurrencies have market capitalizations between $200 million and $2 billion. Examples of mid-capitalization cryptocurrencies include Chainlink and Dogecoin.

• Small-capitalization cryptocurrencies have market capitalizations between $50 million and $200 million. Examples of small-capitalization cryptocurrencies include Aave and Compound.

• Finally, micro-capitalization cryptocurrencies have market capitalizations of less than $50 million. Examples of micro-capitalization cryptocurrencies include Fantom and Hedera Hashgraph.

The market capitalization of a cryptocurrency is an indicator of its overall value. You can figure it out by multiplying the total number of coins in circulation by the price of a single coin at the time. This offers you a decent understanding of the market's size and level of liquidity for cryptocurrencies. It also offers information on how well the market for digital currencies is doing overall.

Those cryptocurrencies with a market capitalization of more than $20 billion are referred to be mega-capitalization coins. Mega-capitalization cryptocurrencies include Bitcoin and Ethereum.

How to calculate market cap?

Calculate market capitalization as follows: 

The current price per share * Total number of outstanding shares = Market capitalization of the company.

The market capitalization formula is a straightforward computation that multiplies the quantity of shares outstanding by the stock price at the time it is used. This estimate provides a precise view of a company's entire value. It is evident from a comparison of Company N's and Company G's market capitalizations that the former is substantially more valuable than the latter. Company G has a far smaller market value despite having a much higher share price and significantly fewer shares in circulation.

The investment bank then employs a variety of techniques to determine the company's value, taking into account numerous elements such as the company's past performance, current assets and liabilities, and anticipated future earnings. The investment bank can decide how many shares should be issued to the public and at what price once the estimated value of the firm has been computed. Before the IPO, the company had this market capitalization.

The business may decide to issue fewer shares at a higher price in order to raise the necessary funds. For instance, they may raise the same amount of money by issuing 5 million shares at $20 apiece. The ultimate decision over which course to take is based on the objectives of the business. For instance, the corporation can decide to issue fewer shares at a higher price if it wants to reduce the dilution of current owners. On the other hand, if the business wants to create publicity around their IPO, they can decide to purchase more shares at a cheaper cost.

The total circulating supply of a given cryptocurrency must be multiplied by its current market price in order to determine its market capitalization. For instance, if the market price of Bitcoin is $10,000 and there are 18.5 million coins in circulation, its market value is 18.5 million times $10,000, or $185 million.

The following is the universal formula:

The current value of coin * Current supply = Total crypto market cap

The market cap of Dogecoin is $13.9 billion because its face value is at 0.0996, and there are more than 137 billion coins in circulation.

A Diluted Market Cap

A fully diluted market cap includes all outstanding shares, including those held by founders, staff, and other stakeholders as well as shares that have not yet been issued but may do so in the future. It is determined by dividing the current share price by the total number of outstanding shares. This indicates the market capitalization of a company's greatest possible size. A cryptocurrency's market capitalisation can be determined by multiplying its entire coin supply by its current price. The highest potential value of the coin is shown by this.

At the time of writing, the total number of Bitcoins in circulation is 18,472,739. So, the diluted market cap of Bitcoin is 18,472,739 x the current price of Bitcoin.

As we know, the maximum quantity of BTCs worldwide is 21 million. So, to calculate the diluted market cap, we need to imagine that all these coins are currently in circulation. Then the formula is as follows:

21 million * the current price of 1 BTC

The value of all coins in circulation on a particular day is represented by the total market capitalization, whereas the value of all coins that could potentially enter circulation is represented by the diluted market capitalization. The difference between the two provides a gauge of the coin's actual demand. A coin's popularity and demand are shown by the diluted market cap, which should be higher than the overall market cap. Investors may benefit from this as it raises the possibility of a larger return on investment.