What is the capitalization of cryptocurrencies?

Written by Evgenia Sidorova
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Investing reporter
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What is the capitalization of cryptocurrencies?

Cryptocurrency capitalization is a concept that everyone hears about at the same time, but often causes misunderstanding on the part of traders or investors. This happens as a result of the fact that the capitalization of cryptocurrencies has some peculiarities (compared to the more usual capitalizations of individual goods, markets, industries or even companies). We will talk about the differences in cryptocurrency capitalization in this article.

Cryptocurrency capitalization: what is it?

Cryptocurrency capitalization is the number of all crypto assets that are currently in circulation. This is the total value of the coins of a particular cryptocurrency (worldwide). This is the main difference between cryptocurrency capitalization and stock assets: for crypto, the total turnover of issued coins is taken into account, while for stock assets, the turnover on special exchanges is taken into account. 

The capitalization of the crypt is gradually growing, mainly due to the influence of players from Asia, in particular China. Market players in this country are withdrawing their capital into cryptocurrency due to the ban on converting funds into dollars. Thus, traders from China began to turn to Ethereum and Bitcoin, thereby strengthening the position of cryptocurrencies and increasing the capitalization rate.

This characteristic is usually calculated in the US dollar, as the generally accepted currency equivalent for working with cryptocurrency. Capitalization data is constantly updated, which is very important for investors and traders who consider cryptocurrency as a potential working tool.

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