A Comprehensive Guide to Market Capitalization of Cryptocurrencies
When it comes to cryptocurrencies, it’s essential to know the market capitalization to invest appropriately. This is because the prices of these cryptocurrencies change dramatically, and you can lose a significant amount of money in the process. For this reason, experts advise limiting your investment and only investing what you can afford to lose.
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The circulating supply of cryptocurrencies is an essential factor for cryptocurrency pricing. The circulating supply of a currency can change over time based on factors like demand and supply. For the price of a cryptocurrency to rise, more coins must be in circulation. This is why it is essential to monitor the circulating supply of cryptocurrencies.
The circulating supply of cryptocurrencies is the total number of coins, tokens, and other cryptocurrencies. This figure determines a particular cryptocurrency’s market capitalization and is a valuable indicator of coin popularity and dominance. With this information, cryptocurrency investors can make intelligent investment decisions.
Besides the market cap, circulating supply is an essential factor in determining the price of a particular cryptocurrency. It gives investors a sense of how scarce an asset is. As a specific asset’s circulating supply decreases, so does its price. For example, Ethereum’s circulating supply is over 100 million ETH. In trading platforms like OKX, there are other variables that influence a cryptocurrency’s price, such as staked coins.
When determining the value of a cryptocurrency, the fully-diluted market cap is the total market value of a cryptocurrency at its current price, assuming that the supply continues to grow in line with demand. This can be problematic for investors because an increasing supply of coins can cause inflation and a sharp drop in token prices. Still, the fully-diluted market cap is a valuable tool in assessing the value of a cryptocurrency.
Fully-diluted value is calculated by multiplying the current price of a cryptocurrency by its maximum supply of tokens, which includes tokens in circulation and those pending distribution. It is similar to the maximum number of shares in a public stock market. Assuming that all circulating tokens will eventually be issued, the fully-diluted valuation will give an accurate projection of a cryptocurrency’s future market value.
Market capitalization is vital in determining how stable a cryptocurrency investment is in the long term. Smaller-capitalization cryptocurrencies are at risk of rapid price fluctuations. Likewise, the number of coins in circulation rapidly approaches the 21 million-coin limit stipulated in the bitcoin source code.
Bitcoin’s Market Share
The popularity of Bitcoin has exploded over the past few years. The anonymous developer Satoshi Nakomoto, better known as Satoshi, created the cryptocurrency in 2009. Since its release, Bitcoin has been the dominant cryptocurrency. However, it is facing increasing competition from non-BTC coins. Some of these include Defi, NFT, and the Metaverse token.
In mid-December, Bitcoin’s market share had fallen to its lowest level in more than two years. The dominance of Bitcoin versus altcoins had reached a temporary high of 71% but has since eroded sharply. In early 2018, Bitcoin’s market share had dropped below 40% but rebounded to 48% by August. Bitcoin’s market share subsequently decreased again to 40% by October.
While it is impossible to predict the future of Bitcoin’s market share, it does provide investors with helpful information about the current state of the market. However, this simple metric must be revised regularly to provide reliable information about future market trends.
Litecoin’s Market Share
Litecoin is one of many cryptocurrencies to have been gaining market share. Raiblocks has also been making waves in the cryptocurrency community with its lightning-fast transactions and zeroes transaction fees. This could seriously dent Litecoin’s market share. While this cryptocurrency is similar to Bitcoin, it does not have the same security level and a lower transaction cost. This has attracted many users who are looking for a BTC alternative.
Litecoin has a good track record and can be a good investment if you are in it for the long term. Despite its low price, it has grown significantly over the past few years. While it may not be able to compete with Bitcoin or Ethereum, its long-term popularity and long-term performance make it an attractive investment choice for long-term investors. However, investors should remember that Litecoin’s platform may not be as innovative as the competing blockchains and may fall behind in the long run.
In April 2013, Litecoin entered the market at $4.30 but dropped to $1.50 in less than a year. Despite the relatively small initial volume, it quickly caught on and proved a viable option during the cryptocurrency boom in 2017. It sells for more than $70, so it has survived the recent cryptocurrency sell-off better than its competition. While investing in cryptocurrency is speculative, Litecoin is less volatile than its competition and shows more consistency in price and volume than many other coins.