1. basic
Market Cap, short for Market Capitalization, is calculated by multiplying the circulating supply of a cryptocurrency by its current market price. It represents the total value of all circulating units of a particular cryptocurrency.
1.1
"If a cryptocurrency has 1,000,000 coins in circulation and each coin is worth $1, the market cap would be $1,000,000."
2. medium
Market Cap is a key indicator of a cryptocurrency's worth and stability. It's used to compare the value of different cryptocurrencies. However, it's not the only factor to consider when evaluating a cryptocurrency's potential for growth or risk.
2.1
"Bitcoin, with the highest market cap among cryptocurrencies, is often considered the most stable and least risky."
3. medium
When assessing the value of a cryptocurrency, it's important to consider the market cap, not just the individual price of each coin. A coin with a lower individual price but a high market cap can be just as valuable as a coin with a higher price and a lower market cap, due to differences in circulating supply.
3.1
"A coin priced at $0.50 with a market cap of $20 billion is as valuable as a coin priced at $500 with the same market cap, assuming the circulating supply is different."
4. advanced
Market Cap is sensitive to price changes. Large price swings can significantly affect the market cap, causing it to increase or decrease rapidly. This volatility is a key characteristic of cryptocurrency markets.
4.1
"If a major sell-off occurs, causing the price of a cryptocurrency to drop significantly, the market cap will also decrease accordingly."
* All terms and definitions may update as the Cryptionary improves.
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