Market capitalisation is one of the most important metrics in crypto, but it’s often misunderstood. This guide explains what market cap is, how it works, and why it matters when comparing Bitcoin, Ethereum and other digital assets.
Market capitalisation, or market cap, is a simple way to measure the total value of a cryptocurrency. It is calculated by multiplying the current price of a coin by its circulating supply.
For example, if Bitcoin is worth $100,000 and there are 19 million coins in circulation, its market cap would be $1.9 trillion. This gives investors a sense of how large or dominant that asset is compared to others in the market.
Market cap helps you compare the relative size of different cryptocurrencies. Bitcoin has the largest market cap in the industry, often accounting for more than 40 percent of the total crypto market. Ethereum is usually second.
A higher market cap often signals maturity, liquidity and broader adoption. But size isn’t everything. Smaller coins may grow faster, while larger coins may be more stable.
Understanding market cap helps you:
Circulating supply refers to the number of coins currently available on the market. Total supply includes all coins that have been mined or created, including those locked or held in reserves.
For example, Bitcoin has a maximum supply of 21 million, but not all are in circulation yet. Tokens with a small circulating supply and large future emissions may look cheap but have inflated market caps waiting to be realised.
Always consider supply dynamics when assessing a coin’s real potential.
A common mistake is thinking a coin with a low price is “cheap.” But price alone doesn’t reflect value - market cap does.
For instance:
Market cap can guide your investing decisions depending on your risk appetite:
Understanding market cap is one part of the puzzle. Owning your crypto securely is another. No matter the size of your holdings, keeping control of your private keys ensures you’re not dependent on third-party platforms.
Elbaite supports self-custody at every step, whether you’re buying Bitcoin or exploring smaller-cap tokens on the platform.
Elbaite is Australia’s trusted crypto exchange offering both custodial and self-custodial trading options.
Founded in 2017 and fully regulated by AUSTRAC, Elbaite helps Australians invest their way through:
Market cap is a crucial tool for comparing the size and value of cryptocurrencies. It shows how assets stack up against each other and helps cut through misleading price tags. Whether you’re investing in Bitcoin, Ethereum or exploring altcoins, understanding market cap gives you a better foundation for decision-making.Start with Elbaite today and explore a secure, self-custody crypto platform built for Australians who want to invest their way.
Founded in Melbourne, Australia in 2017, Elbaite set out to make cryptocurrency investing safer and more transparent for Australians. Buy crypto and diverisify your portfolio with digital assets like Bitcoin.
"I have been a user of the Elbaite service for a long time and I keep coming back to use this service on a regular basis. An extra couple of stars should be added for the service personnel. Problems are resolved quickly and the patience exhibited by these people is legendary."
Andre - Elbaite Client
Elbaite Pty Ltd ACN:
623 185 875
Elbaite Pty Ltd is a registered DCE with AUSTRAC:
DCE 100593224-001
We acknowledge the Wurundjeri people of the Kulin Nation, the Traditional Custodians of the land we work on, as well as the Traditional Owners of country throughout Australia. We pay respects to people, communities and elders past, present and emerging.
Elbaite is a member of:
Elbaite Pty Ltd (ACN 623 185 875) operates a digital currency exchange registered with AUSTRAC. Please note that digital asset prices can be volatile. We will never ask for the private keys to your digital currency wallet. Elbaite is not liable for any losses you may incur, and you are solely responsible for your investment decisions. Before deciding if our services are right for you, take into consideration your own financial situation & needs and/or obtain professional financial or taxation advice from a licensed provider. Elbaite does not provide financial advice and Elbaite does not have any affiliation with external traders, advisors or trading platforms.
