Cryptocurrency and Market Cap. Pt. 1

Cryptocurrency and Market Cap. Pt. 1 April 13 2018

We’ve talked about Bitcoin and cryptocurrency and how they are used in modern society, where cryptocurrency is going and some existing uses of cryptocurrency and blockchain technology, we haven’t looked at the numbers. If you have ever looked at a cryptocurrency chart you’ve seen two number corresponding to every cryptocurrency, one is the current market price per unit and the other is the market cap. The first number is easy to understand and explain, the current market value per unit is exactly what it sounds like, its how much someone is willing to pay for a unit at that moment. The second is a bit more complicated, the second number, the market cap or market capitalization is the market value of a company’s outstanding shares. So, a company has a finite number of shares, subtracting the shares already sold, they are left with “X” number of shares, multiply this “X” number by the current market value and you get the market cap. For example, if a big company, lets call is Sapple has 1 million shares left and each share is $20 that means the market cap is 20 million. The importance of market cap is that it allows the investor to gauge the growth versus risk potential and provides another aspect of the company’s value. Larger caps experience slower growth with smaller risk, and smaller caps have experienced higher growth but with higher risk. Apple, Amazon, and Google are some companies with higher caps, they are $917 Billion, $757 Billion and $746 Billion respectively, just for some perspective. In cryptocurrency, it’s not the number of outstanding shares that are measured but the number in circulation, which represents how much fiat is invested into the coin.

Here are some articles about Market Cap:

https://www.fool.com/knowledge-center/market-capitalization.aspx

 https://www.ruleoneinvesting.com/blog/financial-control/market-capitalization-meaning-why-price-doesnt-always-equal-value/

 https://en.wikipedia.org/wiki/Market_capitalization