Market capitalization (market cap) is a measure of the total value of all the outstanding shares of a publicly traded company. It is calculated by multiplying the total number of shares outstanding by the current market price of one share.
For example, if a company has 1 million shares outstanding and the current market price of one share is $50, then the market capitalization of the company would be $50 million.
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Market capitalization is used as a way to rank the relative size of different publicly traded companies, with the company with the highest market capitalization considered to be the largest. It is also used to determine the investment return on different companies. For instance, a company with a higher market capitalization may have a lower return on investment than a company with a lower market capitalization.
In the case of cryptocurrency, market capitalization is the total value of all the coins or tokens in circulation for a particular cryptocurrency, calculated by multiplying the total supply of coins or tokens by the current market price. It’s used as a way to rank the relative size of different cryptocurrencies, with the coin or token with the highest market cap considered to be the largest.