All About Market Cap And Some Bitcoin FAQs With It

All About Market Cap And Some Bitcoin FAQs With It

Market Cap is the value held by any coin (Bitcoin and altcoins) in the world of cryptocurrency. The market cap of cryptocurrencies started becoming a more popular term with the rise in the popularity of crypto in the world. Just like other assets, cryptocurrencies also have values associated with them (depending on the market). In this post, we will find out more about the market cap. Let’s get started.

Market Cap: All You Need To Know

How is the market cap calculated?

Today, there are over 5000 different altcoins and they all have a market cap. There is a market value starting from 0 to wherever the peak price of the altcoin is. So, how is the market value of a coin calculated?

Let’s calculate X on a coin;

1 X Coins = $1000

The total amount of X coins in the market = 50 Pieces

According to the values ​​in the example;

X coin market cap value will be 1000*50 = $50,000.

What is the function of a market cap?

There are some important criteria to consider before investing in any altcoin. Among these criteria, one of the most important points to focus on is the market cap, that is, the market value of crypto money. So why does market value matter?

The high or low market value of an X coin also indicates how stable the altcoin is. Of course, when analyzing the market value, you should not be stuck with it. Although it is the first cryptocurrency that has been on the market since 2009, we can see that there are constant fluctuations in the market value of Bitcoin. In other words, it is absolutely wrong to make an investment decision by paying attention to instant data. You can try your hand at Bitcoin investing through bitcoinx.

Each investor examines the general conditions of the market before investing and decides accordingly. Assuming that market cap value, in addition to this, values ​​such as total supply and maximum supply are included, the crypto money that an investor will invest in order to guide his psychology well and avoid emotional movements. The market cap value should definitely look at its maximum supply and circulating supply and 24-hour volume. In other words, in a sense, the market cap value is not only limited to the example we gave above, but also a field that provides general up-to-date information.

Why is market cap important?

Just because the price of a coin X is too high or too low is not enough to invest on its own. Every cryptocurrency has a value. For example, the instant price of an altcoin X may be $10, this alone is not enough to explain that the value of that cryptocurrency is high. At the same time, the market value of that coin is also important. In other words, values ​​such as total market value, maximum supply and circulating supply must be calculated by bringing them side by side. Of course, in addition to all these, an investment decision is not made by looking at the market value of a coin alone. Making fundamental and technical analysis also plays an important role in the investment decision.

How is the market value measured?

There are some criteria that serve to measure market value. When these come together, the market cap of the coin emerges. So, what are these measurements and how are they calculated?

  1. If X coin has 400,000 coins in circulation and each coin is worth $1, the market cap would be $400,000.
  2. If coin Y has 100,000 coins in circulation and each coin is worth $2, the market cap would be $200,000.

When you examine the example we gave above, you can see the difference in market cap between the two. In fact, the price of X coin is $1, and the price of Y coin is $2. But X coin is higher in terms of market capitalization. The reason for this is related to the total circulating supply. As we mentioned above, the price of a cryptocurrency alone is not a sufficient reason to invest in it.

What to do with market value?

Technical analysis topics are actually not enough to just read charts or look at what the experts say. At the same time, it is necessary to make a value analysis about the crypto money to be invested. For example, market cap data should be used to compare X and Y cryptocurrencies. As seen in the example we gave above, the price can be misleading.

Cryptocurrencies are divided into 3 units according to their market value;

  1. Large-Scale Cryptocurrencies: These are cryptocurrencies such as Bitcoin, Ethereum, and the market value of these coins is more than $10 billion.
  2. Medium-sized Cryptocurrencies: These cryptocurrencies are the preferred currencies for short and long-term investments. Average market values ​​range from $1 Billion to $10 Billion. Although these cryptocurrencies are developing positively, they are altcoins that are considered risky.
  3. Small-Scale Cryptocurrencies: These cryptocurrencies have a market cap of less than $1 billion. The change in price movements depends on the course of the market in these cryptocurrencies. In particular, they are much more affected by Bitcoin and Ethereum movements.

As we mentioned above, before making a decision to invest in a cryptocurrency, it is necessary to look at the market value, maximum supply and total circulating supply of the coin. However, these alone are not enough, by going into deeper research; it is necessary to make an investment decision after looking at the news, comments and graphic analysis of crypto money.

Bitcoin FAQs

The most common questions asked about Bitcoin are: Is BTC reliable, is it reasonable to invest in BTC, can BTC disappear in the future. By evaluating the answers we have created against all these, you will find answers to the questions in your mind.

Bitcoin, the first cryptocurrency, has managed to take its place among the most profitable cryptocurrencies after its widespread use. On top of that, the research of those who want to solve the questions that arise in their minds have also intensified.

What is individual mining?

Miners are individuals, institutions, or companies that have a very high impact on Bitcoin, a unit of cryptocurrency. At the same time, these individuals, institutions or companies produce Bitcoin. Upon the increase in the number of individuals who want to do individual mining, “Can I do individual mining too?” brought questions to the fore. The answer to this question is both “yes” and “no”. In the past years, Bitcoin mining was easily done via desktop computers and GPUs. But nowadays this situation is not as easy as it used to be. Because with the introduction of application-specific integrated circuits (ASIC) and chips specially designed for Bitcoin mining, the total processor power in the network has increased considerably.

It is possible for those who want to do individual Bitcoin mining to earn some income through ASIC-based devices. But it should not be forgotten that there will be expenses as well as income. At the same time, Bitcoin mining is done with hundreds of machines today and it is generally preferred to be produced in countries where energy is cheap.

However, if you think that there will be serious increases in Bitcoin prices in the future and you can provide electricity cheaply, you can produce Bitcoin individually, ignoring the heating problems that will occur. Thus, you can be one of the miners that will be needed in the future for the security of the network, and you can have extensive information about the system.

What can you buy with Bitcoin?

Among the things you can buy with Bitcoin, you can buy food, clothes, art products, furniture, books and many other things. After cryptocurrencies became more involved in our lives, Bitcoin (BTC) started to be used in more areas. Although it was considered only as a source of income in the early days, many companies now accept payments with Bitcoin. Especially companies that provide online services, sales are made more with BTC. Although it is not a very high level of prevalence, it is possible to say that it will spread more in the future.

What are the reasons for bitcoin to be safe?

Blockchain and Bitcoin work on three basic principles. These basic principles are: decentralization (closed to the intervention of any authority or third party), peer-to-peer, open-source code technologies. Blockchain, which forms the basis of Bitcoin, which continues its work on the three principles we have mentioned, is an integrity system. At the same time, Bitcoin has aimed at mathematical algorithms, numbers and encryption for security purposes. In short, when a Bitcoin transaction takes place, trust only occurs in mathematics instead of institutions or states that act as intermediaries.

What does an unconfirmed transaction mean?

Transactions that have not yet been confirmed by miners are called unconfirmed transactions. Usually, the confirmation time of a transaction is carried out within 10 minutes. However, with the increasing popularity and popularity of Bitcoin, the confirmation time of transactions made during periods of high concentrations can be realized in a longer period of time. In other words, the speed of execution of transactions mostly depends on the density.

Related posts

The Different Types of Cryptocurrency: Explained

Akarsh Shekhar

The New Crypto Giveaway Scam on Twitter | Know how Companies are fighting it!

Vaishali Sonik

Which Cryptocurrency Is Most Accepted Online?

Akarsh Shekhar