This is a pretty common term that is often misinterpreted, simply put (in terms of crypto), is the product of the amount of tokens times the price of each token. But why is it important? It is a way for you to evaluate the size of a project, a product can have trillions of tokens, but if they are worthless they would have a low market cap. Whereas a more stable project with well implemented tokenomics would have a large market cap, meaning they have a nice balance in the production of their token and their token price. Note that a coin is the native asset of a blockchain and a token can represent any part of the ecosystem you are working with.
To get into the importance of market cap we need to review the topic of market cap. Usually when a token has a limited amount set for their total supply, this means that the price of said token is likely to increase. This is logic being that as time goes on the token's scarcity grows "forcing" an increase in price to reach equilibrium. Of course I am talking about an ideal hypothetical and a general theoretical case.
Note that when we talk about the market cap of a token or coin we are only taking into account the amount that is in circulation, not in the total supply.
Taking Into Account When Investing
You shouldn't use market cap alone to take a decision when considering to invest, but it is a useful tool that you can use to get an idea about the future of the token. What it helps us see is that generally speaking, assets with a low market cap are less stable and less sturdy but have more potential to grow, larger market caps (this is arbitrary but when speaking of cryptos and tokens it is usually > $1 billion) are more stable and more well founded but are less likely to have a significant growth in the near future.