MARKET CAP: WHAT IT IS, AND WHY IS IT IMPORTANT?

We discussed the websites where we could conduct our research about the different crypto coins we’re interested in, and one of the things discussed was that the research websites would give us information about market cap. Today let’s discuss that.

Market cap (market capitalization) in it’s simplest form and defined by Investopedia is: The total dollar market value of a company's outstanding shares of stock. In other words, market cap is really how much a company is worth. The way we calculate the market cap of any company is by multiplying the total number of the company’s shares, by the current price of one share.

In crypto currency world however, since crypto is not a stock, it’s calculated in the same way but we multiply the price of the coin, by the number of coins that have been mined. Since there are only 21,000,000 BTC and out of that amount, 18M have already been mined, to calculate the market cap of BTC we multiply 18M (the amount already mined) by the current price of one BTC ($45K). That leaves us with a market cap for BTC of $846B.

Market cap is classified into investment categories as LARGE CAP, MID CAP, and SMALL CAP. This means that there are large cap coins, mid cap coins, and small cap coins! It’s good to know whether the coin you’re about to purchase is large, mid, or small cap because this tells you how risky (or not) the coin could turn out to be.

Large cap coins could be less risky than small cap coins so knowing the market cap of the coin you’re purchasing will help you to determine the potential of the coin. You’ll find market cap info on the websites you’re conducting research on.

Yes, I know this seems like a lot, but it’s OK … you don’t have to know everything in the first week or month (or even the first year!) Just keep being open to new information because the way it works is that little by little, as our minds/brains become accustomed to the new language of crypto, we begin to understand more and get the hang of it. There’s a whole lot I still don’t know but I have Mentors to guide me as I invest; it’s a constant learning process!🤷🏾‍♀️

But think of where you can be by the end of the year if you’ll just be consistent, learning about crypto, investing in it, and even trading it. You know I do all of the above, and if you’d like to learn, or need mentoring in the crypto (or FOREX) space, reach out to me and I’ll give you the hook up!✍🏾

That’s enough for today. Peace and favor rests on YOU!🤑

Copyright ©2022 Sherma Jacqueline Felix, BLACK ADVANTAGE Publishing™ . The author shall neither be liable nor responsible for any loss or damage allegedly arising from any information or suggestion in this post.