Market Capitalisation
The total market value of a company or cryptocurrency, calculated by multiplying the current price by the number of shares or tokens in circulation.
Market capitalisation is the total market value of a company or crypto asset at the current price. For stocks, that means share price multiplied by shares outstanding. For crypto, it's token price multiplied by circulating supply. People use it as a rough measure of size — how big something is relative to the rest of the market. It moves in real time with the price, so a 10% drop in price is a 10% drop in market cap.
How It Works
- Stock example: $50 share price × 100 million shares = $5 billion market cap
- Crypto example: $2 token price × 500 million circulating supply = $1 billion market cap
- The number updates continuously as price moves — it's live, not fixed
- Fully diluted valuation (FDV) uses total max supply instead of circulating supply — always check this for newer crypto projects before buying
Types of Market Capitalisation
Large-cap ($10B+)
Established companies or coins with deep liquidity and relatively stable prices. Bitcoin, Apple, and similar assets fall here. Not immune to big moves, but less prone to sudden 50% drops overnight.
Mid-cap ($2B–$10B)
More volatile than large-caps and more sensitive to news. There's more room to run in both directions — this is where a lot of active traders spend their time.
Small-cap ($300M–$2B)
Thinner liquidity, wider spreads, and sharp price swings on relatively low volume. Higher risk, but also where the biggest percentage gains tend to come from.
Micro-cap (below $300M)
Speculative territory. A single large holder can move the price materially. Due diligence matters more here, not less.
Trading Tips
A high market cap doesn't mean a stock is expensive — you need price-to-earnings or price-to-sales for that
In crypto, a low market cap with a high FDV means a lot of supply is still to be unlocked — that's potential selling pressure baked in
Large-cap crypto (BTC, ETH) tends to move first in market-wide rallies and recoveries — worth watching for direction
Small-cap coins can multiply fast, but they can also lose 80–90% before most retail traders have reacted
Related Terms
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