Market Cap 101
You often hear companies or different mutual funds being categorized by their market cap. Small cap, mid cap or large cap. But what do these terms really mean? The “cap” part of this term is short for capitalization, which is a measure by which we can classify a company’s size. It is important for investors to understand these terms, which are not only ubiquitous but also useful for gauging a company’s size and riskiness.
Calculating Market Cap:
Market capitalization is just a fancy name for a straightforward concept. It is the market value of a company’s outstanding shares. Market cap is determined by taking the stock price and multiplying it by the total number of shares outstanding. For example, if Cory’s Tequila Corporation (CTC) was trading at $20 per share and had a million shares outstanding, then the market capitalization would be $20 million ($20 x 1 million shares). It’s that simple.
Why It’s Important:
A common misconception is that the higher the stock price, the larger the company. Stock price as a result may misrepresent a company’s actual worth. Lets take a look at two fairly large companies, IBM and Microsoft. On February 15, 2013 stock prices were $199.98 and $28.05 respectively. Although IBM’s stock price was higher, we can see that MSFT’s market cap of $234.6 billion was actually larger than IBM’s $225.1 billion. If we compared the two companies by solely looking at their stock prices, we would not be comparing their true values, which are affected by the number of outstanding shares each company has – Source
Cryptocurrency Market Capitalization, Coin Value, Trade Volume and Supply for ALL crypto coins can be found at coinmarketcap.com. The more immersed in Crypto Space you become, you will find yourself visiting this site quite often, perhaps even daily!
Another valuable resource is Bitcoin Block Explorer, an open source web tool that allows you to view information about blocks, addresses, and transactions on the Bitcoin blockchain. The source code is on GitHub.
BTC, LTC, ETH, EOS, BAT, SALT, OMG, STORJ, NEO, XLM, QUA, PAY, LSK..and more! The coins listed here, have stellar visions and are actively bringing their exceptional concepts to fruition.
(Hold on for dear life!)
*** Crypto 101 ***
I am not a financial adviser. So please do your own research before joining any programs, platforms or exchanges and take responsibility for any decisions you make. All those decisions especially ones that result in YOU choosing to make investments are made at your own risk.
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