In the cryptocurrency market, the market cap is calculated by multiplying the circulating supply of a particular cryptocurrency by its current market price.
The entire quantity of coins or tokens in use and available for trade is referred to as the circulating supply.
This number can change over time due to the issuance of new coins or tokens, or the destruction of existing ones through mechanisms such as token burns.
Market cap is used as a measure of the total value of a cryptocurrency, similar to how it is used for stocks.
It is important to note that the market cap is not the same as the total amount of money invested in a particular cryptocurrency.
It is merely a measure of the total value of the circulating supply.
Additionally, the market cap may be used to evaluate the worth of various cryptocurrencies.
For example, if cryptocurrency A has a market cap of $10 billion and cryptocurrency B has a market cap of $5 billion, it can be inferred that cryptocurrency A is more valuable than cryptocurrency B.