When talking about a particular cryptocurrency, one of the things that stands out the most is its market capitalization, an index that shows us the total amount of capital invested in said cryptocurrency, and therefore, its solidity.
Market capitalization for a cryptocurrency is the total capital or money invested in that project. Now, What is cryptocurrency or crypto market cap? Well, it's practically the same, except that instead of pointing to a specific cryptocurrency, it shows the capital that exists around all the cryptocurrency projects present in the market, let's see.
Currently, the market capitalization of crypto is close to $270 billion; to be exact, as of the date of this publication. The capitalization of cryptocurrencies totals $268.606.532.094 USD, This is a figure that is not insignificant, but which has had better numbers compared to previous years. For example, in 2018, the market capitalization of cryptocurrencies was more than 820 billion dollars, with a daily volume of approximately 44 billion. However, despite the fact that the total capitalization is currently at much lower levels than those seen in 2018, the daily transaction volume exceeds 59 billion dollars.
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Market capitalization in previous years
As we already mentioned, the cryptocurrency market cap showed exceptional numbers for January 2018, exceeding $820 billion; however, these numbers went down and hit a low close to $100 billion by the end of the year. Then, in mid-2019, the cryptocurrency market cap rose again and reached a new number for June 2019, with more than $338 billion in market cap.
Source: CoinMarketCap
This chart shows a growth of over 5.000% in the total capital invested in cryptocurrencies from 2017 to early 2018. However, in January of this year, the market capitalization of cryptocurrencies started with a value close to 192 billion dollars and reached a maximum in February with 307 billion dollars in capital.
Source: CoinMarketCap
With the arrival of the pandemic and the current economic crisis, the market capitalization of cryptocurrencies plummeted in March by almost 50%, reaching a value of $141 billion. Then, despite a recovery of almost 90% of the capital, the market again saw a decline when a new halving on the network Bitcoin, the leading cryptocurrency on the market and the most widely used and important to date. By May 11, the market saw a 13% drop in investment capital, reaching a level of $239 billion.
Now, the cryptocurrency market is showing a recovery and remains constant with a value close to $270 billion.
Bitcoin Capitalization
Source: CoinMarketCap
As the graph shows, Bitcoin is the leading cryptocurrency par excellence and the one with the highest percentage of investment in the cryptocurrency market with 64,19% of the total capital. It is then followed by Ethereum, another of the most important cryptocurrency projects thanks to the many implementations that its ecosystems allow, such as the creation of tokens, decentralized applications (dApps), smart contracts (smart contracts) and decentralized finance (DeFi). Ethereum holds almost 10% of all capital invested in cryptocurrencies.
Although the market capitalization of cryptocurrencies is still very young and should not be compared to the capitalization of stocks or gold, for example, these numbers show us that users increasingly understand the true value that cryptoassets have in society, and that they will play an important role within it in the coming years.
Cryptocurrencies have the characteristics and potential to be a safe and efficient means of exchanging value, and as a store of value, Bitcoin has proven to be suitable for storing assets for the long term.
Finally, although market capitalization is not a definitive indicator of the strength of all cryptocurrencies, it does allow us to get an idea of how the market moves around a particular cryptocurrency, allowing us to see the correlation between the price or value of the cryptocurrency and the number of coins in circulation.
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