What is Market Capitalization? We Explain it for You!
A Blockchain Supplemental Tutorial
by
W. Paul Alexander
In both the cryptocurrency world and the stock market scene, you are likely to come across the term "Market Capitalization" before too long. Don't just sit there nodding your head unknowingly. Read below and you will never catch yourself pretending to understand another conversation on asset health.
Market Capitalization (General): The Value of a Publicly-Traded Company's Total Shares
Market Capitalization (Crypto):
1. The Total Value of the Crypto Market as a Whole
2. The Total Value of a Single-Given Project
Both are expressed as a value within a given fiat currency (USD or Yuan/Renminbi usually).
In the cryptocurrency world, Market Capitalization (or 'market cap') is a useful value to track the health of a given project. It also gives a good indicator for determining mass adoption of a given project, as market capitalization will
For instance, take a look at the following chart. It shows that total market capitalization of all crypto markets is at 257 Billion USD
Total Market Capitalization: 257 Billion US Dollars
Why is market capitalization important in the CryptoSphere?
Market capitalization in the cryptocurrency world is an important indicator for a number of things, namely:
1. Overall Financial Health of a Project: Usually the higher the market cap, the healthier the coin. However, 24-hour volume of a traded asset is also important in determining the health of a project, not just market cap, as 24-hour volume also indicates the amount of activity on a blockchain in the last 24 hours. A project with a large market cap but a very low 24-hour volume may be in trouble financially.
2. Market Capitalization is the starting value that gives us other important indicator values, such as Bitcoin Dominance. To understand Bitcoin Dominance expressed as Market Capitalization, we simply find out what percentage the BTC Market Capitalization is of the total crypto market capitalization. Whatever that percentage is equals the BTC Dominance.
For Example, using a fabricated example of total market cap at 200 Billion and a BTC market cap of 120 Billion USD, the Bitcoin Dominance would be 60%, which is similar to the real-world numbers.
3. Most Importantly, it also gives us the capability to rank cryptocurrencies according to their market capitalizations
Source: CoinMarketCap's Top 100 Cryptocurrencies Charts
How Do We Figure Out Market Capitalization?
It's Simple!
Market Capitalization can be determined using a very, very simple mathematical equation: 
So, using Bitcoin, you can see that the circulating supply is 18,257,075 BTC with a single-coin value of $9117.92. This leads to a total BTC market capitalization of $166,466,564,088.
That's All There is To Understanding Market Capitalization!
Until Next Time....
Deo Volente!
Thanks for Reading!
