Market capitalization describes a company’s value as decided by the stock market. The total market value of all outstanding shares is how it is described. In the blockchain industry, market capitalization is used to describe a metric used to assess a particular crypto’s relative size. To compute the market cap of a coin, we multiply the number of coins circulating in the market by the coin’s current market value.
It is vital to keep in mind that the market cap is not the same as money inflow, even though it may provide some information about the size and performance of a company or cryptocurrency project. Therefore, it does not reflect the amount of money in the market. It’s a frequent fallacy that price directly affects market cap calculation, but in reality, even a tiny change in price can have a big impact on market size.
In Tradfi, market capitalization is frequently used to establish a company’s size before comparing its financial performance to that of other businesses of varying sizes.
