What is market capitalisation?

Market capitalisation (commonly abbreviated to mcap) is one way of measuring the overall value of a cryptocurrency. It is calculated as being the product of the last market price for the cryptocurrency and the total supply of coins or tokens of the cryptocurrency. For example, if the last price for a coin was $10 and there are 100m coins in the total supply, the market capitalisation for the cryptocurrency is $1b (since the mcap is $10 X 100,000,000 = $1b). You can see a list of the market capitalisations of cryptocurrencies here.

Market capitalisation does not take into account liquidity or volume. For this reason, it should be used carefully when comparing cryptocurrencies: just because cryptocurrency A has a higher market capitalisation than cryptocurrency B, it does not necessarily mean that there is more money “contained” in A than B. Another caveat is in comparing very different cryptocurrencies. Some cryptocurrencies are pegged to a particular fiat price. For example, Tether (USDT) is designed such that 1 USDT = $1 always. Comparison between the mcap of Tether and the macp of a non-pegged cryptocurrency will not be terribly informative. It can be a useful first port of call when comparing the values of cryptocurrencies as a whole, but it should never be the only method of comparison.