GlossaryBeginner

Market Cap

The total value of all circulating units of a cryptocurrency, used to gauge its relative size.

Market capitalization, or market cap, is calculated by multiplying a cryptocurrency's current price by the number of units in circulation. It is commonly used as a rough way to compare the relative size of different cryptocurrencies.

Market cap reflects circulating supply and price at a given moment; it is not a measure of the total cash that has flowed into an asset, and it can change quickly as price moves. When people say "market cap" without qualification, they almost always mean this circulating-supply figure specifically — see Kaavon's "Circulating Market Cap" glossary definition, which names this same calculation explicitly, and contrast it with fully diluted valuation, which instead uses maximum possible supply.

Examples

A cryptocurrency with a higher price but a smaller circulating supply can have a lower market cap than one with a lower price and larger supply.
Market cap rankings are often used to get a general sense of how cryptocurrencies compare in size to one another.