If you are new to the cryptocurrency market, you might find yourself confused when someone starts talking about cryptocurrency cap, since all you have done until this point is focus on the price that the coin has at the moment, you constantly check if this has changed or not.
But what a lot of people don’t seem to know is what is the difference between the price of the coin and the cap of this market. When someone tries to explain you what they are you might think they seem to be the same, and even if it may sound like that, you need to know the real difference between those two.
The simplest way we can explain the difference between the two is by saying this, the price or value of the coin is what you need to pay, or someone pays to you to be able to buy it. But the cryptocurrency cap is the amount of Fiat money that is currently being invested into this market.
What does this mean?
This confusion needs to be avoided since these two will be completely different. If one coin in particular has a market cap from around 164 dollars, one simple coin or token from this crypto currency will be worth $0.2 (now you see why knowing the difference is very important).
So what this means, is that the demand for the coin (cryptocurrency cap) will end up dictating the price. So knowing this difference, whenever you hear some news about someone investing millions of dollars into certain cryptocurrency you can use this knowledge to track how much the cryptocurrency cap of this coin will go up. And perhaps you will be able to see how much, if at all, will go up in price. Knowing this is a very useful tool.
Compare the crypto coins with the cryptocurrency cap
Whenever you decide to invest into any crypto currency you might start comparing the price of each to see which one is the best. But this is not gonna be a helpful method, since there are coins like Bitcoin or Ethereum that are not only the more well known coins in this market, but for this same reason they have more people investing and because of this they have a higher cryptocurrency cap.
The only way you will be able to decide in which one to invest is by comparing the cryptocurrency cap, because even if they might be wildly different, if you check the price of one single coin or token, and compare it to the cryptocurrency cap you can see if there is opportunity in the market with the currency in particular.
And after checking one, you can do the same with others until you find one where you feel particularly safe investing in. After you choose the one where you are going to put your money into, make sure that you will only put a number that you will be comfortable if you lose it afterwards, because this market is still not centralized, which means that the prices will not always be regular. But if you fell ready to take a little chance with something like this you will possibly win a lot.
So the biggest thing that you will need to do before investing is to check the cryptocurrency cap since thanks to this you might know if the platform you chose to be with, will have some opportunity to grow beyond, and even possibly get close to some of the biggest ones like Bitcoin or Ethereum (if those are not the ones you choose), but if you choose those you will be able to see if there is still confidence in this ones.