What is Low Cap Coin in Crypto?
Low Cap Coin is a fairly new term for many investors and especially new traders entering the Crypto market. This term refers to coins with low market capitalization compared to Mid and Top Cap coins.
Low Cap Coins are coins with a capitalization value of less than 50 million USD. Typically, these Low Cap Coins will have relatively cheap prices, low 24-hour trading volume, and low intraday liquidity. However, this is considered a quite attractive investment channel, but not all traders have enough knowledge to identify potential Low Cap Coins.
So what is Low Cap Coin? What is the application of Coin Low Cap in cryptocurrency investment? How to find a potential Low Cap Coin? Join HaiManh.VN to find out in today's article.
1. WHAT IS LOW CAP COIN?
Before going into details about what Coin Low Cap is in Crypto, HaiManh.VN wants you to clearly understand how the concept of Market Cap (Market Capitalization) in Crypto is defined.
1.1. What is Market Cap?
The term Market Cap or Market Capitalization is used as much for stocks as it is for cryptocurrencies and individual Blockchain projects.
For the Crypto market, this concept tells us the current market value of a certain Blockchain network and we often call it Coin Market Cap. It is calculated by multiplying the Circulating Supply of the cryptocurrency by its price per unit (1 Coin).
What is Market Cap?
From there, we have the formula to calculate Coin Market Cap as follows:
Market Capitalization (Coin Market Cap) = Circulating Supply x Price
Real-life example: Let's say we have a Blockchain project named A. A has a total supply of 1,000 coins and all of them are in circulation. The current market price of A is $100. So the question is: What is coin A's market capitalization?
Applying the calculation formula that HaiManh.VN just provided above, we can easily calculate the market capitalization of coin A as:
Market capitalization A = 1,000 x 100$ = 100,000$
1.2. What is Low Cap Coin?
In the above section, you have clearly understood the concept of what Coin Market Cap is in the cryptocurrency market. In this part, let's join HaiManh.VN to learn in detail what the term Coin Low Cap is.
Low Cap Coin
The investment term Low Cap Coin refers to coins/tokens that are newly launched to the community and have a lower capitalization compared to other coins. So what market capitalization is considered a Low Cap Coin?
Low Cap Coins are coins with a market capitalization of less than 50 million USD and are known to have cheap prices in the Crypto market. Here are a few characteristics by which you can recognize them:
The coin has a low market capitalization
Relatively cheap price
Low 24-hour trading volume
Intraday liquidity is also low
2. DISTINGUISHING TOP, MID AND LOW CAP COINS IN CRYPTO
In this section, let's join HaiManh.VN to distinguish between types of Coins based on their market capitalization:
2.1. Top Coin
Top Coins are cryptocurrencies with a current market capitalization of up to 1 billion USD or more and have extremely good liquidity. Normally, Top Coins will be ranked first on the CoinMarketCap rankings. In addition, Top Coin has very strong growth potential, has its place on the analysis table, is considered relatively safe, has high practical applicability and is unlikely to disappear from the market.
If you are a trader aiming for long-term investment and savings, this is not a bad choice. Besides, the trading volume of these coins is also quite large so their liquidity will be guaranteed.
The Top Coins that are receiving the most attention in the cryptocurrency market are typically Bitcoin (BTC), Ethereum (ETH), Tether (USDT),...
For those who don't know about CoinMarketCap, this is a website that tracks most of the coins currently listed on the market, typically Bitcoin, Litecoin, Ethereum,... and allows users to update their current value of each cryptocurrency as quickly as possible. In addition, this website also shows the number of coins in circulation, transaction volume within the past 24 hours, value fluctuations within 24 hours as well as the market capitalization of each specific coin.
You can refer and register for a CoinMarketCap account HERE.
2.2. Mid Cap
Mid Cap are coins with market capitalization from 100 million USD to less than 1 billion USD. The image below is some Midcap coins shown on CoinMarketCap:
Mid Cap are coins that are of great interest due to their attractiveness when capital flows begin to increase. With a moderate price plus the potential for sudden price increases, its resilience is considered better than other coin lines.
Besides, Mid Cap is also safe for new investors, and has high profitability compared to other lines. However, the market is constantly fluctuating, so choosing the right time to invest is very important.
2.3. Low Cap
As mentioned in the previous section, Low Cap are coins with a market capitalization of less than 50 million USD. See a few examples of typical Low Cap coins in the image below:
SUMMARY
Hopefully this article is useful and can help you better understand investing in low cap coins in the market. If you have any questions or encounter any problems, do not hesitate to leave a comment below for immediate support from Trading Insght!
