Why does a coin’s price mean nothing without its market cap?
Imagine two cryptocurrencies.
Coin A costs $1.
Coin B costs $100.
It seems like the first one is much cheaper.
But that could be a complete illusion.
You need to consider how many coins are in circulation.
The formula is very simple:
Market cap = price × number of coins in circulation.
For example:
Coin A:
1 billion coins × $1 = $1 billion market cap.
Coin B:
10 million coins × $100 = $1 billion market cap.
So both have the same market cap.
That’s why the statement:
“This coin costs only $1, so it’s cheap”
proves nothing on its own.
Before evaluating a cryptocurrency, I’d look at at least:
📊 market cap
📊 trading volume
📊 number of coins in circulation
📊 maximum supply
📊 liquidity
📊 tokenomics
This is much more useful than simply looking at the price.
Tomorrow, we’ll go over another thing that beginners often get wrong.
#Crypto #Bitcoin #Ethereum #BNB #Binance
Imagine two cryptocurrencies.
Coin A costs $1.
Coin B costs $100.
It seems like the first one is much cheaper.
But that could be a complete illusion.
You need to consider how many coins are in circulation.
The formula is very simple:
Market cap = price × number of coins in circulation.
For example:
Coin A:
1 billion coins × $1 = $1 billion market cap.
Coin B:
10 million coins × $100 = $1 billion market cap.
So both have the same market cap.
That’s why the statement:
“This coin costs only $1, so it’s cheap”
proves nothing on its own.
Before evaluating a cryptocurrency, I’d look at at least:
📊 market cap
📊 trading volume
📊 number of coins in circulation
📊 maximum supply
📊 liquidity
📊 tokenomics
This is much more useful than simply looking at the price.
Tomorrow, we’ll go over another thing that beginners often get wrong.
#Crypto #Bitcoin #Ethereum #BNB #Binance
