This is the value of all the coins or tokens available for purchase on the market. In other words, a market cap is not calculated by a cryptocurrency’s total supply, but by its circulating supply.
Is market cap based on total supply or circulating?
For a cryptocurrency like Bitcoin, market capitalization (or market cap) is the total value of all the coins that have been mined. It’s calculated by multiplying the number of coins in circulation by the current market price of a single coin.
Does supply affect market cap?
A cryptocurrency’s market cap is generally affected by two crucial variables––supply and price. If a crypto’s supply is scarce, it tends to be more valuable. A coin with a high price could still have a large market cap, even with a smaller circulating supply, and vice versa.
Does circulating supply affect price?
Circulating supply (the number of coins in circulation) and total supply (the maximum number of coins that can exist) are key determinants of a coin’s price.
What happens when circulating supply increases in crypto?
The more coins are in existence, the more demand there needs to be for a price to increase. A low supply means that the token (a share) is scarce and if in high demand, its price will likely rise. On the other hand, if the demand for a cryptocurrency is low but has a large supply, its price may drop.
Does supply affect market cap?
A cryptocurrency’s market cap is generally affected by two crucial variables––supply and price. If a crypto’s supply is scarce, it tends to be more valuable. A coin with a high price could still have a large market cap, even with a smaller circulating supply, and vice versa.
