Market capitalisation
Market capitalisation is the total value of all circulating units of a cryptocurrency: price times circulating supply.
Explained simply
A coin costing 1 euro is not "cheaper" than one costing 100 euros. What matters is how many units exist. Market cap = price × circulating supply, and only this figure makes coins comparable.
The metric has pitfalls: for small coins with little trading, a single purchase can move the price and hence the "capitalisation" strongly without real capital behind it.
"Bitcoin dominance" indicates Bitcoin's share of the total capitalisation of all crypto-assets, a frequently used sentiment indicator.
From the familiar world
A company's market value: share price times number of shares. A 5-euro share can belong to a more valuable company than a 500-euro share.
An example
Bitcoin usually accounts for around half or more of total crypto market capitalisation. The ten largest crypto-assets together account for well over three quarters.
Why it matters
The metric guards against the fallacy "this coin is still cheap". Advisers should have it ready when clients compare prices.
To pass on
„A coin at one euro is not cheap just because it costs one euro. What counts is price times supply, like a company's market value.“
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