What is market capitalization? - Crypto in Plain English - Episode 161 - by cryptohunt.it

What is market capitalization?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Today, let us explain market capitalization, a very basic term any investor should be familiar with.

Market capitalization simply refers to the amount of money all the shares of a company are worth when taken together. Let’s take an example: Coca Cola, the company. Right now, a single share is worth about $65 dollars, and there are about 4.4 billion shares in circulation. Multiply the two, and you will see that Coca Cola has a market cap – short for capitalization – of 281 billion US dollars.

That value helps you compare companies. Pepsi for example, has a market cap of 240 billion US dollars, slightly less than Coca Cola. That means that investors think that Coca Cola has a little more business potential than Pepsi.

The same applies to blockchains. A cryptocurrencies market cap is the amount of coins that exist, multiplied by the value of each. Is your head buzzing? This example will make more sense: A single Bitcoin is currently worth about $30,000. There are roughly 19 million Bitcoins. Add all those zeros and you will see: All of the Bitcoins together are worth 600 billion dollars in market cap, almost three times as much as Pepsi and more than double that of Ethereum.

And now that you understand market cap, go browse the web and compare: How much larger is Apple than Microsoft? How many car companies could you buy with all of the Bitcoins? We are sure you’ll find tons of interesting comparisons, whether they are useful or just fun.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.