To calculate market capitalization for a given cryptocurrency, the current cryptocurrency price is multiplied by its circulating supply. The general formula is as follows:
Market Cap = Market Price × Circulating Supply
Example:
On October 2, 2019, at 11:00 UTC, the Bitcoin price was $8,257.42 and the circulating supply was 17,969,000 BTC. By multiplying these numbers, we get the actual Bitcoin market capitalization: $148,377,579,980.
Fact: The formula for crypto market capitalization slightly differs from stock market cap calculations. To calculate market capitalization for traditional securities, it is necessary to take the current stock price of a particular commodity and multiply it by the number of its outstanding shares. Essentially, outstanding shares are defined by the number of stocks (assets) that are currently held by the company’s shareholders. Just like circulating supply in the crypto market, the number of outstanding shares may vary dramatically over time. Read also: what is circulating supply?