Market Capitalization & Cryptocurrency Investment

Every other person seen around you is eager to venture the cryptocurrency investment procedure because such is the impact produced by these digital currencies and the technology known as the Blockchain that empowers them. Even for those who are still dizzy about the subject, a substantial proof in the name of ‘Market Capitalization’ of the cryptocurrencies is available, which has the ability to not only wipe out their confusions but, also, to encourage them to venture the practice of cryptocurrency investments with much positivity.

 

Yes, the Market Capitalization of the majority of the cryptocurrencies, especially the prominent ones, stands more than $1 Billion value with the Bitcoins topping the chart, unsurprisingly. If you are a seasoned trader, you would certainly know the importance of the market capitalization in determining the value and success of the asset involved but, if you are a newbie, let us show the real meaning and as well as the real power of this factor!

 

Market Capitalization

 

The market capitalization of the cryptocurrency means the total number of units/coins available in the market multiplied by the individual unit’s market price value. Therefore, higher the value, significant is the asset, as it shows the asset’s prominence in the trading market undoubtedly. As of April 2018, the market cap of Bitcoin stands approximately at $120 Billion, which shows, investing in them would certainly favor your financial future, appreciably! While the idea of relying on the market capitalization factor to decide the suitable cryptocurrency for investment is perfect in the case of prominent market players like the Bitcoins, Ethereum, and Litecoins, it might not be a fair method when it comes to the growing altcoins.

 

Yes, a recently introduced altcoin in the idea of capturing the attention of the trading market might venture the ways to hike its market cap value, where its developers can hold the majority of the coins, while the actual number of coins available to the traders are fewer. That is, the altcoin developers might claim there are these numbers of coins available, which they either hold or in the premine condition, done mainly to inflate the market cap value in the idea of luring the investors. One best example for the above case is the Auroracoin, whose market value once stood more than $1 billion is nowhere near to it now.

Therefore, it is also not advisable to entirely rely on the market cap factor to choose the specific cryptocurrency for investment, especially if the cryptocurrency is a nascent one. Once you have identified the suitable digital coin for you, trading or investing on them isn’t any brainer, which can be better understood by following this link