fbpx

The Crypto Market Cap

Share to Linkedin Share to Twitter Share to Facebook Share to Print More
Benzinga Money is a reader-supported publication. We may earn a commission when you click on links in this article. Learn more.

new eyes to the cryptocurrency market. Crypto was a significant part of the discussion involving the debasement of the dollar and Federal Reserve intervention in the markets. For the first time, the crypto market was seen as a viable hedge against dollar inflation. Institutional investors that once denounced the entire market as a scam were frontrunners in the race to acquire not only more crypto but the startup companies that had formed its market infrastructure.

One of the most telling indicators of growth in the crypto sector is the total crypto market cap. As investors build value in a market holistically, all market participants usually experience the expansion. As a way of measuring the total value of a market, the market cap serves as a barometer of a market’s maturity, risk and reward potential and, of course, total size.

The market cap for crypto mirrors the market cap for securities in many ways, but there are some important differences, which will be explained here.

Crypto Market Cap

The crypto market cap is a measurement of the relative size of the crypto market. It is calculated by adding together the market caps of each individual coin within the market. The market cap of each individual coin is calculated by multiplying the current price per coin/token with the total number of them that are in circulation. For instance, bitcoin that has yet to be mined is not included in bitcoin’s market cap, although we know they will exist in the future.

Because crypto is a decentralized market, every exchange can determine the coins they will include in the crypto market cap. You will get a different total market cap from CoinGecko than you will from CoinMarketCap because CoinGecko currently keeps up with 5,847 coins while CoinMarketCap follows 6,523. The process for getting listed on these influential sites is unique to each site.

Literally anyone can create an exchange in the crypto space, but most of them do not attract enough attention to be influential. Though there is no central authority pegging a market cap or coin pricing to any standard, the market itself tends to determine limits on volatility. Experts believe that authority on the subject will eventually centralize, although they are uncertain of how that authority will exist and how many perspectives it will include. 

For instance, many casual investors assume the Google listed price for Bitcoin is the true price, though Google sources that information from Coinbase. The popular finance platform for Yahoo sources its bitcoin price from CoinMarketCap. These prices are different even if you search for the real-time price at the same time.

Volatility in the Market Cap

Coins and tokens can and do trade for different prices on different exchanges. This is similar to the securities market, although crypto exchanges can have a price spread that is quite noticeable. Because the individual price of each currency affects the market cap, differences in the pricing cause volatility in the number each exchange reports.

Denominating the Market Cap

The crypto market cap can be denominated in fiat currency because bitcoin has been informally connected to a dollar value. Much of the volatility of bitcoin comes from the fact that there is no centralized standard for the link between crypto and fiat currencies. As a result, most crypto experts prefer to express the crypto market cap denominated through bitcoin.

As the largest cryptocurrency in the world, bitcoin tends to influence the volatility of the entire market. Most large crypto exchanges will include a metric known as “dominance” showcasing how much of the market cap top coins are representative of. This metric is usually associated with bitcoin and varies based upon the number of coins that are being tracked on an exchange. For instance, CoinGecko records BTC dominance of 57.6% while CoinMarketCap has the same metric at 59.2%.

Does Market Cap Matter in Cryptocurrency?

As a relatively young market, crypto does not have a history of data to provide analysts with value justifications. As a result, many theories about the future value of top coins and the market as a whole rely on comparisons of the current crypto market cap against more established industries. 

The total market cap gives a general indication of the popularity of the idea of crypto. For instance, the market cap during the 2017 mania reached almost $900 billion according to CoinGecko. That peak coincided with the highest instance of Google searches for crypto-related terms on record and the most aggressive movement of investors into the crypto space.

Calculating the Cryptocurrency Market Cap

If you wanted to calculate the crypto market cap through the CoinMarketCap exchange, you would start by calculating the market caps of each coin the exchange includes. For the total market cap, you would add all of these values together.

Highest Crypto Market Cap

The figures for the highest market cap differ depending on who you ask because there is no centralized authority. Most crypto enthusiasts and experts would likely agree that the highest total market cap for the entire market has passed $800 billion but has yet to reach $1 trillion.

Trade Cryptocurrency 

Safely and efficiently trading cryptocurrency depends a great deal on the trading platform you choose. You can hold a portfolio on many platforms, as many of them double as custodial platforms. Keep in mind that you may see different prices for the same asset on different platforms. 

This actually offers an opportunity for arbitrage or profiting from the difference in pricing on different exchanges. This is an advanced technique, however, and it is not always possible because of the relatively high transaction fees associated with most cryptocurrency exchanges.

Best For
Crypto Trading
Overall Rating
Get started securely through eToro’s website
Best For
Crypto Trading
N/A
1 Minute Review

eToro, headquartered in Cyprus, England and Israel, has provided forex products and other CFD derivatives to retail clients since 2007. A major eToro plus is its social trading operations, including OpenBook, which allows new clients to copy trade the platform’s best performers. Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features

Best For
  • U.S.-based cryptocurrency traders
  • Social and copy traders
  • Simple user interface
  • Community engagement and following other traders
Pros
  • Expansive network of social trading features
  • Large client base for new traders to imitate
Cons
  • U.S. traders can only buy cryptocurrency
  • Only 15 cryptocurrency pairs available
Best For
Buying & selling Bitcoin
Overall Rating
get started securely through Robinhood’s website
Best For
New Investors
Overall Rating
try for free securely through Gemini Crypto’s website
Best For
New Investors
N/A
1 Minute Review

Gemini is a cryptocurrency exchange and custodian that offers investors access to 26 coins and tokens. Founded in the US, Gemini is expanding globally, in particular into Europe and Asia. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.

Gemini is 1 of the only brokers with multiple platform options based on skill level. New investors will love the streamlined interface of Gemini’s mobile and web apps, while advanced investors might appreciate all the tools that come with ActiveTrader. 

In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review.

Best For
  • New investors looking for a simple mobile and web app
  • Experienced investors who need a more advanced platform with more tools
  • Users looking for a 1-stop-shop to buy, sell and store all of their coins
Pros
  • Easy and quick signups — can get started in as little as a few minutes
  • Multitude of platforms to accommodate traders of all skill levels
  • Hot wallets include insurance to protect your from theft and hacking attempts
Cons
  • Charges both a commission and a convenience fee for users buying and selling through the desktop or mobile app
Best For
Crypto Investing
Overall Rating
Get started securely through Coinbase’s website
Best For
Crypto Investing
N/A
1 Minute Review

Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs. 

You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.

Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.

Best For
  • New cryptocurrency traders
  • Cryptocurrency traders interested in major pairs
  • Cryptocurrency traders interested in a simple platform
Pros
  • Simple platform is easy to operate
  • Comprehensive mobile app mirrors desktop functionality
  • Coinbase Earn feature rewards you with crypto for learning about available coins
Cons
  • Higher fees than competitors
Best For
Mobile Traders
Overall Rating
get started securely through Voyager’s website
Best For
Mobile Traders
N/A
1 Minute Review

Voyager is a leading name in the sphere of cryptocurrency investing, giving you access to over 50 tokens and coins. Buy, sell and swap assets using Voyager Crypto’s simple mobile platform available as a free download for iOS and Android users. 

When you invest through Voyager, you’ll pay nothing in commissions, which is a major benefit when compared to other cryptocurrency brokers. Voyager is also one of the only brokers we’ve seen that allows users to earn interest on their crypto investments. 

Though the broker could do more to improve its customer service, it’s an excellent option for beginner investors and seasoned professionals alike.

Best For
  • Cryptocurrency investors looking for a wide selection of supported projects.
  • Investors who prefer mobile trading.
  • Anyone interested in earning interest on their crypto investments.
Pros
  • Simple, straightforward and intuitive mobile platform
  • Wealth of investment opportunities
  • Allows users to earn interest on select crypto investments
Cons
  • Only available for mobile users — no desktop platform
  • Limited routes to contact customer service team
Best For
No or Low Fees
Overall Rating
get started securely through BlockFi’s website
Best For
No or Low Fees
N/A
1 Minute Review

Maybe you think cryptocurrency is the future, or perhaps you were swept up in the initial waves of Bitcoin. BlockFi may be your next step if you’re ready to evolve as a crypto investor.

Whether you’re a native crypto user or curious enough to start investing, BlockFi seeks to bring institutional-grade financial products to crypto markets that often face restricted access. It strives to bring clients low-cost, simple applications designed to maximize the potential of crypto assets. Learn more in our BlockFi review.

Best For
  • Crypto native clients. You own Bitcoin now. You’re the friend who fills in the blanks when conversation turns to cryptocurrency, and you devour crypto literacy content like it’s your job (and maybe it is). BlockFi’s platform can help take your crypto assets to the next level.
  • Crypto fringe clients. If you’ve dabbled in buying alternative assets like crypto or know enough to be interested, BlockFi can help you take the next step.
  • Crypto curious clients. If you’re both intrigued by bitcoin and the type of person who obsessively learns everything you can about things you’re new to, BlockFi’s crypto asset platform might be the entry point you’re looking for.
Pros
  • Mostly fee-free platform
  • Market-best interest rates
  • Earn interest, trade and borrow from a centralized hub using the BlockFi app
Cons
  • Mostly restricted to those with a base knowledge of cryptocurrency
  • No dedicated relationship with an investment advisor, so best for those who have a solid handle on crypto trading
Best For
High Spending Limits
Overall Rating
get started securely through Coinmama’s website
Best For
High Spending Limits
N/A
1 Minute Review

Coinmama prioritizes convenience, security, and efficiency in its cryptocurrency exchange. Customers buy and sell directly with the company, so orders fill instantly and without any hassle. 

While you’ll need to get a crypto wallet from another company, the ability to buy and sell seamlessly and securely through Coinmama’s platform makes crypto trading easy and safe.

Best For
  • Crypto traders who want instant transactions and immediate access to their crypto
  • Buyers who want to buy coins with a credit or debit card
Pros
  • Fills orders and sends your coins in minutes
  • Wide variety of payment options accepted
  • Generous loyalty program that provides serious discounts to qualifying customers
  • Fast and friendly customer service
Cons
  • 3rd-party crypto wallet required to actually receive your coins.
Best For
DeFi Swap
Overall Rating
Get started securely through crypto.com’s website

A Wide Open Market

Although the total crypto market cap serves as a marker for popularity, influence and integration, there is another important takeaway from its volatility. The obvious differences in how major exchanges produce their number points to just how much room there is in the world of crypto for an authoritative standard. Although the prevailing buzzword around crypto is decentralization, this is not what the market seems to be doing.

Most cryptocurrencies, including major currencies like Litecoin and Ripple, are far less decentralized than they let on. The emotionless technology behind crypto certainly has the potential for decentralization. The people who control it — that’s a different story altogether. The psychology of major developers and users of crypto seems to default to centralization. Most people flock to just a few exchanges. Most people trade only the top coins. And with traditional banks and institutional investors entering the space with big money, many retail investors are preparing to exit crypto and move right back into fiat once crypto becomes “worth” more.

Where will the crypto market go from here? The market cap may give us technical indicators, but it is also quite political. Pay close attention to it to determine how people relate to finances in the future.

Try Gemini

Gemini builds crypto products to help you buy, sell, and store your bitcoin and cryptocurrency. You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through one clear, attractive interface. Gemini Crypto Platform offers excellent account management options. You can manage your account at a glance, view your account balance 24-hour changes and percent changes. Get started with Gemini now.

Exclusive: Cryptocurrency Weekly Newsletter

What you’ll get: a deep dive into relevant crypto projects, exclusive insights into alt coins from the pros & more!