Grassroot Crypto Education (Vol3) - Crypto Market capitalization and it's elements: Practical use of tools to explore different cryptocurrencies| 10% to @steemkidss

Hello Crypto kids,

I am very happy to be here to submit my participation to the vol 3 of the grassroot crypto education given by our lovable Prof @fredquantum.

This vol, we shall be discussing on the market capitalization of cryptocurrency.

Please follow along as we begin

EXPLAIN MARKET CAPITALIZATION. INCLUDE YOUR UNDERSTANDING OF CURRENT PRICE AND CIRCULATING SUPPLY OF AN ASSET. HOW IS MARKET CAPITALIZATION CALCULATED.

Market capitalization can be explained as a financial measure of an asset that is mostly used for publicly traded firms.
It is usually computed by the multiplication of the share price with the amount of it's outstanding shares.

It is at times calculated by analyst as the price of virtual currencies multiplied by the number of coins in the market.

The market capitalization of a coin helps to provide an investor with the knowledge of the overall size of the market.
It also helps to show the flow in and flow out of money in each cryptocurrency.

The market capitalization of a coin is very important to both investors and traders, as it helps to show the growth potential of the coin, if it is worth investing in or not.

In other words, for cryptocurrency like BTC, market capitalization can be explained as the total sum of value of all coins that have been mined by miners and users.

CURRENT PRICE AND CIRCULATING SUPPLY

From my understanding, the term current price of a coin is the present price of the coin as at when spoken of.

For example, Mr A and Mr B are speaking about a particular coin and decided to check it's price on coinmarket cap, the price of the coin as at the period of their discussion is the current price of the coin.

I also understand it to be the present trading price of a cryptocurrency, it can also be referred to as the price in which a market order will be executed.

Also, the term circulating supply is used to explain the total number of available tradable tokens.
It can also be explained as the total number of tokens that is allowed to flow in circulation which can easily be gotten and traded by traders.

When a number of token is newly created by a company, a given number is locked which cannot be traded while the others are allowed to flow in circulation, the circulated tokens is refered to as the circulating supply of the coin.

HOW IS MARKET CAPITALIZATION CALCULATED

The calculation of market capitalization of a coin is very easy to understand.

The market capitalization of a coin is gotten from the multiplication of it's circulating supply and it's current price.

Mathematically, it is represented as:
MC = CS × CP

Where
MC= Market Capitalization
CS = Circulating Supply
CP = Current Price.

For example, if the current price of JUECO token is $30 and it has a Circulating Supply of 7000000.
Its market capitalization will be equal to $210,000,000 which is gotten from 30×7000000, as the formula demands.

EXPLORE https://coinmarketcap.com/, SHOW HOW TO CHECK RANKING OF ASSETS BY MARKET CAPITALIZATION. SELECT THE ASSET ON NUMBER 10 AND INDICATE ITS; CURRENT PRICE, CIRCULATING SUPPLY AND MARKET CAPITALIZATION, JUSTIFY WITH THE SIMPLE CALCULATION. (SCREENSHOT REQUIRED).!

To carryout this task, I visited coinmarket cap and the below appeared.

Source

From the above screenshot, the rank of the cryptocurrencies is indicated with a blue outline.
And as seen above, the rank 1 of the coinmarket cap is Bitcoin, Rank 2 is Ethereum and the 10th rank which happens to be our center of discussion is polkadot [DOT].

POLKADOT
The coin on the 10th rank is polkadot as at when this post was made, and the following analysis were coined from it.

Source

COIN	ANALYSIS
NAME	POLKADOT
MARKET CAP	$20,985,948,411
FULLY DILUTED MARKET CAP	$23,485,623,992
CIRCULATING SUPPLY	987,579,314.96 DOT
VOL/MARKET CAP	0.06105

Justifying it's market cap with our calculation, we have;
MC = CS × CP
= 987579314.96 × 21.25
= $20,986,060,442.9.
So, therefore, the calculated market capitalization of polkadot is $20,986,060,442.9.

CONCLUSION

Indeed, the knowledge on the market capitalization of a coin is very essential as it helps investors to check and examine the growth potential of a coin, which inturn influences his investment decisions.

I appreciate Prof @fredquantum for his educative lecture, I look forward to your next lecture Prof.
Cc
@ngoenyi
@steemkidss