Capitalization is usually called the value of all assets that are in circulation. On traditional trading platforms, the role of the latter is played by various securities owned by public organizations. In the case of electronic money, this indicator indicates the total value of all issued coins that are present on the market. In plain language, capitalization is the total value of a particular virtual currency in the world. As a rule, this characteristic is expressed in dollar equivalent. Unlike the algorithm for calculating the value of assets on stock exchanges, a different mechanism is used to determine the capitalization of digital coins. In the first case, the turnover on exchanges is taken into account, in the second - the total number of coins created.

For investors, the capitalization of cryptocurrencies is one of the most important indicators. The higher the so-called ceiling of a coin, the less susceptible to outside influence its value (less volatility). So, in order to move just a few points, a whole series of multi-billion dollar transactions will be required. While even the activity of ordinary players can significantly affect the price of new tokens.

You can also look at the level of capitalization on various specialized services. However, according to experts, one should not completely trust such resources, since they only show an approximate picture. This happens because their algorithms do not take into account the actual turnover of crypto coins, but the number of funds generated. At the same time, they neglect various losses associated with computer equipment. In addition, the inaccuracy in the testimony is associated with the “disappearance” of one million Bitcoins, which Satoshi Nakamoto allegedly left for himself during the formation of the site. Experts have found that a total of 3 to 5 million tokens are considered “lost forever.”

In the past year, the total capitalization of cryptocurrencies was marked by several significant figures. If in the spring it amounted to $100 billion, then by the beginning of November this amount had doubled. In general, the dynamics of capitalization growth amounted to more than 1100%.

The information was taken from CoinMarketCap - one of the most popular services that provides statistical data on virtual currency exchange rates. Turning to the resource, you can see that more than 50% of the entire electronic money market is accounted for by Bitcoin. Second and third places were shared by Ethereum and Bitcoin Cash, respectively.

The capitalization of cryptocurrencies depends on 2 main indicators: the exchange rate and the volume of money in circulation. For example, the issue of Bitcoin is constantly increasing, as the coin continues to be actively mined by miners. However, since the beginning of the platform’s existence, the complexity of the algorithms has been increasing every month, which also has a significant impact on the cost of its tokens.

Some electronic money is characterized by primary emission. In this case, the parameter is influenced by the market activity of the currency and its exchange rate, since the total volume is fixed and unchanged. An example is the Nextcoin resource.

Due to the fact that capitalization is directly proportional to the value of the coin, it also depends on demand indicators. The latter depends on a range of factors:

1. Actions of influential players on cryptocurrency exchanges.
2. Predictions of experts, various statements of popular analysts.
3. Innovative technologies used in the blockchain industry.
4. Adoption of electronic money at the legislative level and giving it official legal status.
5. Other news information related to virtual coins.

Bitcoin's value has soared this year thanks to increased demand for the digital currency. The popularization of virtual money is associated with its legalization in Japan, the holding of numerous crowdsales, the introduction of the SegWit2x protocol, the constant launch of new forks and the participation of the project team at large-scale conferences.

If at any point the demand for virtual funds begins to decline, capitalization will also fall. The position of the government of countries such as China and the USA is of great importance for this parameter. If they introduce a ban, the electronic currency will immediately go down. That is, both the price and capitalization indicators will drop sharply. It is worth remembering the situation that took place in 2013. In an extraordinary rally, Bitcoin's price soared to $1,000 before plummeting to $200 as large investors began buying up the coin, attracted by the prospect of quick profits.

This indicator was positively influenced primarily by players from China, who took an active part in the process of withdrawing capital from the state. Since there is a prohibition established at the legislative level, transferring funds by converting into dollars is impossible. But the amounts earned must be stored somewhere. Therefore, investors turned to the opportunities provided by Ethereum and Bitcoin.

The biggest difficulty in determining the value of virtual coins is that their real value cannot be calculated. There is simply no connection to any real objects or currencies. Another reason is the difficulty of identifying the number of lost tokens, since when recording devices fail and keys to electronic wallets are lost, access to digital money is closed forever. This is why the capitalization of cryptocurrencies becomes so complicated.

At the moment, the digital asset market continues to actively develop, which is why the volatility of many tokens is increasing. Different trading platforms offer different prices for the same coins. However, absolutely all market participants are interested in the successful future of the electronic space and invest real money to purchase or mine virtual coins. However, this does not exclude frequent sharp spikes and drops due to the influx of large volumes of investment funds. Perhaps in the future a certain regulatory mechanism will be used.

Any potential investor should first of all monitor this parameter of virtual money. The latter is also influenced by various events in the world related to blockchain and cryptocurrencies.

Some people mistakenly believe that value and capitalization are identical concepts. Of course, they are closely interrelated, but they refer to completely different things. For example, the quotation of coins and their value have a direct relationship. However, if the former begins to grow, and a strong player appears on the market, numerous small speculators are sure to appear as well. If the profit of a large investor decreases or is fixed, a correction is made.

The continued devaluation of the yuan against the dollar will only increase the capitalization of virtual funds. Moreover, the process itself occurs at a fairly high speed. Over the past 3 months, the Chinese national currency has managed to strengthen its position, and this was reflected in the quotes of Dash, Monero and Zcash. It is these digital currencies that have been most impacted by the return of capital to the strengthening yuan. This event had virtually no impact on Bitcoin, since its rate is primarily determined by demand.

In 2017, the No. 1 cryptocurrency positioned itself as a reliable exchange asset with an upward trend. As its price increased, capitalization also increased, and this process will last at least another 9 months. If the governments of world powers decide to legalize electronic coins, this will have a positive impact on their value. However, the granting of legal status to tokens is unlikely to take place in the near future.

Having understood what capitalization is, the user inevitably faces the question of what is the benefit of knowing this information and how to apply it. As mentioned above, this parameter should not be confused with the cost of tokens. They are different in essence, although they have a certain relationship - a collapse in capitalization will provoke a fall in electronic money quotations, and their upward price jump will lead to its growth.

The mechanism is explained by the fact that the value of a digital currency is largely based on people’s trust. Watching how it breaks the next high, investors conclude that demand has begun to exceed supply. Some players invest colossal amounts, and, therefore, the asset has potential and its price will rise in the future. To get the greatest benefit, you need to invest in one or another project immediately after the start. After all, as soon as the digital currency attracts the interest of truly large players, they immediately pump it up. In addition to them, a whole variety of various exchange bots and small speculators take part in the process, who accelerate the artificial price jump to unprecedented proportions. This will continue until any negative news appears or large investors themselves decide to stop inflating the speculative bubble. Then, as a rule, a correction follows, and in some cases even a trend change.

Other significant differences between electronic coins and classic exchange assets include the inability to correctly establish real capitalization indicators, since it will not be possible to accurately determine the amount of funds available to investors. After all, a huge number of tokens have disappeared as a result of hacker attacks, are stored in forgotten wallets or were sent to non-existent addresses (it is impossible to restore a personal key, as well as cancel a transaction). In addition, any hardware malfunction can cause the loss of digital coins if they were placed in a hardware wallet that was installed on the computer.

Despite the fact that the maximum and current number of coins of certain types of virtual money is known exactly, it is almost impossible to figure out how many of them are in real circulation. According to experts, up to 4 million Bitcoin tokens alone were lost forever, which makes it impossible to accurately calculate the level of capitalization.

However, this parameter is still very indicative and demonstrates the general degree of popularity of the platform. That is why, before starting trading on the stock exchange, it would be useful to analyze the movement charts of this characteristic.

Capitalization of cryptocurrencies is rightfully considered one of the most important indicators in trading. It reflects the total value of all tokens that are in circulation, and also demonstrates the degree of popularity of the site.

When choosing a digital currency for investment, you should also rely on this characteristic. A coin with a significant capitalization is quite resistant to minor movements. An instant price jump is unusual for such a currency. But platforms with small capitalization, on the contrary, have an unstable exchange rate and can change it every minute. Thus, decentralized platform No. 1 Bitcoin increased its value 10 times in 1 year. Ethereum achieved similar results in just 6 days.

Anyone considering investing in cryptocurrency should take these nuances into account. In addition, you should not ignore daily changes in capitalization - such fluctuations are a kind of market signals.

The first digital currency Bitcoin is the undisputed leader of the cryptocurrency world. Considering the indicators of the dominance index, it is difficult to imagine that any of the altcoins will be able to dislodge it from the throne. According to the latest data, Bitcoin's capitalization today accounts for almost 55% of the total value of the global digital currency market and this is far from a record figure. In some periods, the dominance index exceeded the 70% mark; rarely did it fall below the 45% line, quickly restoring its previous positions.

What is Bitcoin capitalization?

When starting to discuss the realities that caused such a significant increase in the value and market performance of Bitcoin and cryptocurrencies in general, it is worth understanding the definition of the term “capitalization”. There are some similarities between decentralized digital assets and their centrally issued and regulated fiduciary counterparts. Note that despite the fundamental differences, in both cases classical economic terminology is used to designate the features of the functioning of such opposite financial phenomena. Among these is the term market capitalization, which is used to denote the total value of any of the assets put into circulation.

According to generally accepted standards, the function of assets in classical markets is performed by securities. They are issued by public companies and listed on stock exchanges. In the case of digital currencies, slightly different rules of the game apply. The capitalization of cryptocurrencies, and with them Bitcoin, reflects the total value of all virtual coins issued at the time of settlement, in contrast to the stock market, where the starting point is only securities turnover indicators. To determine this parameter, the US dollar is used, which still plays the role of the main reserve currency of global significance. It is worth noting that Bitcoin, perceived by most people as a good option not only for storing, but also for increasing savings, will most likely remove its main fiduciary opponent from the throne in the foreseeable future.

Considering the comparative youth of the class of digital monetary units, one feature can often be noticed - the lack of clear standards in defining the term Bitcoin market capitalization and similar indicators of the global cryptocurrency market. Meanwhile, a sharp line should be drawn, because Bitcoin, being a recognized leader, is significantly superior to the rest of its “colleagues” taken together, many of which are just forks developed on the open source code of the progenitor.

Capitalization of Bitcoin and the digital currency market

Ordinary people are rarely interested in the technical side of the digital currency phenomenon. What is important to them is the fact that the value of the first cryptocurrency and other virtual coins has undergone incredible upward adjustments. As a result, in 2017 the capitalization rate of Bitcoin increased significantly and at the time of writing (December 16, 2017) it is slightly more than $296 billion. The entire cryptocurrency market is estimated at $543 billion.

The importance of the capitalization phenomenon is to be found in the fact that it determines the attractiveness of Bitcoin and various altcoins from the point of view of investing money. There is a natural connection between the value of quotes and indicators of exchange rate changes (volatility). That is, with an increase in the value of the total mass of virtual coins, a specific crypto asset becomes a more reputable market player and is less susceptible to speculative schemes provoked by trend traders.

Difficulties associated with determining Bitcoin capitalization

Bitcoin's capitalization this year has exceeded the most optimistic forecasts and continues to grow. It can be calculated quite easily, using as a basis a simple algorithm that involves multiplying the total number of units issued by current market quotes. This is what the administration of popular analytical web resources, for example, coinmarketcap.com, does. Therefore, these data can hardly be called accurate.

How can we explain the significant discrepancy between the online version and the real Bitcoin capitalization indicators recognized by the academic circles of the crypto community?

The following factors need to be considered:

1. At the time of writing, the number of coins generated was approaching 17 million.
2. Approximately 4.2 million more Bitcoin units will be “issued”.
3. The emission rate decreases by 2 times every 4 years. After the next halving, which happened in the summer of 2016, it amounts to 1,800 virtual coins (coins) per day, and in 2020 it will stop at around 900 conventional units.
4. The number of coins (lost, destroyed) that cannot be restored, which are not taken into account when determining the rate and capitalization of Bitcoin by analytical web resources, is very high. Some indicate a figure of 1 million (the number of coins that went to the creator of the phenomenon, Satoshi Nakamoto), but according to experts, the number could be 2.5–4 times higher.

A simple logical conclusion suggests itself that online analytical resources are distinguished by the superficiality of the calculation criteria used, and to determine the real indicators it is worth conducting a more in-depth analysis.

For your information, halving is a twofold reduction in the number of prize coins issued by the system not only of Bitcoin, but also of most alternative monetary units to miners for discovering a new block in the blockchain system.

In the case of Bitcoin, the duration of each cycle is 4 years. Since the founding of the Bitcoin payment network and cryptocurrency, the number of premium coins was 50 coins; in 2012 it decreased to 25 conventional units, and in the summer of 2016 it amounted to 12.5 Bitcoin. After the next halving, which will take place in 2020, the number of prize coins will be 6.25 Bitcoins.

Dependence of Bitcoin capitalization on various factors

Despite the presence of innovative mechanisms, Bitcoin is a relatively young financial phenomenon, just entering the stage of global recognition and maturity. Although different altcoins inherited certain features from the pioneer, the first cryptoasset itself received a lot as an inheritance from its fiduciary counterparts. For example, volatility, which is important for determining the real capitalization indicators of Bitcoin. Contrary to popular misconceptions, volatility should not be considered a purely cryptocurrency phenomenon. It came to the ecosystem of digital assets from fiat, although it has a much wider scope, taking into account the difference that exists between the cost of Bitcoin digital coins and the quotes of paper banknotes of national currencies.

The second important element is the number of issued coins, the number of which is constantly increasing. Unlike exchange rate fluctuations, emission carried out only through mining is a static indicator. Although there are several factors here that are taken into account in the algorithm previously compiled by the developer Satoshi Nakamoto. In particular, as the number of virtual coins to be generated decreases, the difficulty of mining increases. Against the backdrop of what is happening, Bitcoin is becoming a scarce asset, less and less susceptible to depreciation.

An increase in the rate is reflected in the growth of Bitcoin capitalization. Although we should not neglect the role played by the classical parameter, which implies the importance of the relationship between supply and demand in the market. As is the case with other young assets, the popularity of Bitcoin among investors and its market value indicators are still significantly dependent on several factors. Among them are:

1. Periodic interventions carried out by major players in the crypto trading market.
2. Introduction of technical innovations and algorithms in the field of digital currency.
3. Forecasts and statements by luminaries of economic thought.
4. Attitude of officialdom, amendments to current legislative standards and regulatory standards.

Why did Bitcoin's capitalization increase in 2017?

Bitcoin capitalization growth chart from 2013 to 2017

The current financial year has turned out to be a record year for both Bitcoin and the vast majority of altcoins.

The sharp increase in Bitcoin capitalization today has several justified reasons:

1. Increased demand in general for alternative currencies.
2. The rise of the ICO phenomenon. This is the initial offering of tokens from various startups, issued in a fixed quantity, which are sold both for cryptocurrencies (Bitcoin, Ethereum and others) and for fiat funds. Often, successful ICO campaigns provoke the emergence of new varieties of digital currencies.
3. Entering the official level in some states. Especially in Japan and other Asian countries.
4. The emergence of several forks (Bitcoin Cash, Bitcoin Gold), which proved their worth against the background of pessimistic forecasts of experts.
5. Integration of the new Lighting Network protocol and the likely activation of the Segregated Witness2X release, which are designed to solve the problems of scaling the system of the first cryptocurrency.
6. Comparative stabilization of exchange rate changes.
7. Growing adoption of Bitcoin by representatives of the retail sector (trade).

The first breakthrough, which occurred in the spring of this year, was marked by cryptocurrencies reaching a total value of $100 billion. But rapid growth continues today. It should be expected that the figure of 300 billion dollars, no matter how impressive it may seem, is far from the upper threshold of the possible capitalization of Bitcoin, which has become an investment hit of all times.

Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Although other cryptocurrencies have come before, Bitcoin is the first decentralized cryptocurrency - Its reputation has spawned copies and evolution in the space.

With the largest variety of markets and the biggest value - having reached a peak of 18 billion USD - Bitcoin is here to stay. As with any new invention, there can be improvements or flaws in the initial model however the community and a team of dedicated developers are pushing to overcome any obstacle they come across. It is also the most traded cryptocurrency and one of the main entry points for all the other cryptocurrencies. The price is as unstable as always and it can go up or down by 10%-20% in a single day.

Bitcoin is an SHA-256 POW coin with 21,000,000 total minable coins. The block time is 10 minutes. See below for a full range of Bitcoin markets where you can trade US Dollars for Bitcoin, crypto to Bitcoin and many other fiat currencies too.

Mobile payments made easy Bitcoin on mobiles allows you to pay with a simple two step scan-and-pay. No need to sign up, swipe your card, type a PIN, or sign anything. All you need to receive Bitcoin payments is to display the QR code in your Bitcoin wallet app and let your friend scan your mobile, or touch the two phones together (using NFC radio technology).

Security and control over your money Bitcoin transactions are secured by military grade cryptography. Nobody can charge you money or make a payment on your behalf. So long as you take the required steps to protect your wallet, Bitcoin can give you control over your money and a strong level of protection against many types of fraud.

Works everywhere, anytime Just like with email, you don"t need to ask your family to use the same software or the same service providers. Just let them stick to their own favorites. No problem there; they are all compatible as they use the same open technology. The Bitcoin network never sleeps, even on holidays!

Fast international payments Sending bitcoins across borders is as easy as sending them across the street. There are no banks to make you wait three business days, no extra fees for making an international transfer, and no special limitations on the minimum or maximum amount you can send.

Choose your own fees There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. Most wallets have reasonable default fees, and higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it"s possible to send 100,000 bitcoins for the same fee it costs to send 1 bitcoin.

Protect your identity With Bitcoin, there is no credit card number that some malicious actor can collect in order to impersonate you. In fact, it is even possible to send a payment without revealing your identity, almost just like with physical money. You should however take note that some effort can be required to protect your privacy.

Balances - block chain The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.

Transactions - private keys A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.

Processing - mining Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.

Bitcoin market capitalization

Cryptocurrency capitalization indicators depend on the total volume of virtual money and the cost of one monetary unit. Today, Bitcoin remains the leader among cryptocoins. To make money on this coin, you need to understand what market capitalization is.

Bitcoin market capitalization today

If you pay attention to the online charts, which clearly demonstrate the growth of the coin, you can conclude how much the level of development of this virtual currency has risen. According to experts, the growth of this coin is determined by its properties, namely, the fact that the amount of this cryptocurrency is rapidly increasing. Some experts in the crypto community are convinced that the concept of Btc capitalization is very relative and uncertain, since it is impossible to accurately determine the number of coins.

The dominance index is used to measure the percentage of btc in the total number of virtual currencies in the global market. This indicator was created by a community of miners with the involvement of experts in order to conduct a convenient evaluation analysis. The dominance index makes it possible to make forecasts in this area. Regarding Bitcoin, its dominance index has been the highest for a long time.

Some experts are convinced that the btc dominance index is now falling, as other players enter the market in the form of equally strong currencies. If you pay attention to the current exchange rate, you will notice the rapid growth in popularity of the Ethereum crypto-coin, which is not going to lag behind btc.

Factors influencing bitcoin capitalization

Each owner of this cryptocurrency wants to accurately determine the development indicators of the coin, since in this way they can influence the rate. Today, in order to have an impact on the Bitcoin rate, you need to invest billions of dollars. If you look at this process from the perspective of other cryptocurrencies, you will notice a pattern: the higher the capitalization rate, the more funds will be needed for investment. Of course, not everyone can afford this, so it is very difficult to influence the Bitcoin rate.

Determining capitalization indicators:

• Currency exchange rate (you can view the data in real time on our website)
• Behavior of major market players
• Government authorities, which, for example, can issue a certain resolution that will determine the further status of a specific cryptocurrency.
• Opinion of popular Bitcoin analysts - experts with a high reputation can make large-scale forecasts that also influence public opinion.

Ideally, Bitcoin capitalization should be focused on the number of lost coins.

If you want to keep abreast of the latest news, our website provides up-to-date information from the world of cryptocurrencies:

• Charts
• Current market rates (bitcoin-dollar/euro/ruble)

You can track the dynamics of changes per day, week and year, make your own forecasts and study the opinions of experts.

Bitcoin capitalization reflects the total value of issued BTC coins in US dollars, taking into account current market trends. In general, capitalization is one of the main parameters used to compare cryptocurrencies and analyze their popularity in the financial market. How is the calculation carried out? What does this parameter depend on, and what is the value of Bitcoin today? We will talk about these and other nuances in detail in the article.

Subtleties of calculating Bitcoin capitalization

Stock market participants are faced with the capitalization of shares or other securities every day. The difference is that when calculating the parameter, only those assets that are in exchange turnover are used. In the case of cryptocurrency, the situation is different. Here, when calculating, the total number of issued coins is taken, which gives a certain error to the final result.

Online Bitcoin rate chart:

As of July 25, 2018, 17,165,075 BTC were issued, with a total value (taking into account the market price of $8,248.03) of $142.371 120,622 billion. Bitcoin capitalization shows how interesting the virtual coin is to market participants, primarily investors. The higher the parameter under consideration, the lower the exchange rate price fluctuations, and the fewer factors can change the BTC exchange rate. For example, in order to artificially shift the price of Bitcoin upward, you need to buy at least several million dollars worth of BTC, and vice versa.

Theoretically, every person can calculate the capitalization of Bitcoin. The formula includes only two parameters - the average market rate and the total number at the time of calculation. These indicators are freely available - they can be viewed on special websites and charts (for example, on the resource prostocoin.com/marketcap), and then multiplied by each other.

Unlike securities, where the calculation gives more or less accurate results, Bitcoin's capitalization is an approximate parameter. The real figure differs from what is offered by numerous sites with charts and ratings of cryptocurrencies. The reason for the error was noted above. The calculations use the total number of coins issued, and only those BTC that are in circulation on exchange platforms should be taken.

The calculation using the formula “market price per number of issued BTC” does not take into account cryptocurrency that has been lost, stolen, or lies “dead weight” in the accounts of tens of thousands of users. For example, the fate of the million BTC that the “father” of Bitcoin Satoshi Nakamoto received at the stage of its creation is still unknown.

What does it mean? In reality, the number of coins in market circulation is much lower. This means that Bitcoin’s capitalization also has a smaller value than what we see in various ratings and charts.

What affects Bitcoin capitalization - main parameters

The cryptocurrency market is in constant flux. If you visit several exchange sites that accept BTC, you can see a slight discrepancy in the cryptocurrency rate on each site. The cost of virtual money on exchanges depends on user activity, time of day and other nuances. This means that the capitalization parameter for different services will also differ.

Despite the existing errors and shortcomings of the calculation, the cryptocurrency market (including Bitcoin) exists. Moreover, it is developing and in the future it may replace the usual system of non-cash transfers. Confirmation of this fact is the success of many new virtual coins, which within 1-2 years have reached a capitalization of several billion dollars. The same Bitcoin Cash can boast of 14.8 billion dollars, EOS - 7.8 billion, Stellar - 5.5 billion, and so on. Many people do not know about some cryptocurrencies, but their market share is growing every year.

When analyzing the factors influencing , two main “levers” of influence are taken into account - the total number of issued BTC, as well as the exchange rate price. The first parameter is constantly changing due to virtual coins. And if previously processors and video cards were used to mine Bitcoins, today super-efficient ASICs are used for these purposes.

With the increase in capacity in the cryptocurrency network, the difficulty of mining also increases, which on July 25, 2018 reached 5.077 Terahashes per second. For comparison, back in January of this year the complexity was lower - 1.93 TX/second. If we consider capitalization for cryptocurrencies that are not mined, the approach is different. When calculating, the exchange rate price and the activity of market participants are taken into account.

When studying BTC capitalization, it is important to understand that the rate also depends on a number of nuances:

1. Operations of major market participants. The activity of traders on exchange platforms can lead to minor fluctuations in the price of Bitcoin on the market. An increase or decrease in the rate often pushes other participants to buy and sell the asset, which makes changes in value even more noticeable. As a result, capitalization also changes.
2. The emergence of new virtual coins or developments in the cryptocurrency world. The price of BTC may be affected by the emergence of more powerful ASICs for mining, the release of cryptocurrencies with better characteristics, and other factors.
3. Interviews with celebrities and authoritative experts who have influence in the cryptocurrency world, statements by government representatives of various countries. There are many cases where, against the background of such statements, the price of BTC moved up or, conversely, fell.
4. Changes in legislation regarding Bitcoin. A ban or restriction on the circulation of cryptocurrency can lead to a loss of interest in Bitcoin and a decrease in its rate. In turn, the legalization of BTC in a large country has a positive impact.
5. Other news related to the cryptocurrency sector.

Taking into account the above, the conclusion suggests itself that Bitcoin capitalization is a parameter that is constantly dynamic and does not have a fixed value. For example, today (July 25, 2018) it is $142.3 billion, but tomorrow or in a few minutes this figure may change up or down depending on market trends.

If we analyze the recent events of 2017, the increase in the exchange rate price, and with it the capitalization, occurred against the backdrop of the legalization of virtual coins in Japan, the holding of numerous events, the consolidation of the status of cryptocurrencies in many countries of the world, and so on. On the other hand, in 2018, the value of BTC decreased, and capitalization followed suit. At the end of December 2017, this parameter reached $315 billion, and over six months it decreased by 2.2 times. It is believed that the reason was the correction of the exchange rate price after an abnormal increase and bringing the value to the real market parameter.

Bitcoin capitalization for today and forecasts for the future

Graph showing changes in Bitcoin capitalization level

An accurate assessment of the value of virtual currencies is impossible due to the lack of their real value. This is due to the fact that the price of cryptocurrency is not tied to material things - simple currencies, gold, raw materials, and so on. The situation is complicated by the fact that it is impossible to find out the exact turnover of Bitcoin on exchanges. Many coins have already been lost or are not included in the auction.

Bitcoin capitalization as of today (July 25, 2018) is $142.371 billion. But this is an approximate parameter that characterizes the total value of all issued coins, and not those that are on the market. Today Bitcoin ranks 1st in terms of capitalization, significantly ahead of its closest pursuer Ethereum, which has a figure of $47.88 billion. In third place is XRP with a capitalization of 17.9 billion. Bitcoin Cash lost its position a little, moving to 4th place (14.8 billion). In turn, EOS and Stellar coins show a good growth trend ($7.8 and 5.5 billion, respectively).

As for the future of Bitcoin, many experts are confident that the exchange rate will rise. For example, analyst S. Shevchuk from Ukraine assures that by the end of 2018 the price of BTC will rise to 15 thousand dollars. An even more optimistic opinion is expressed by S. Ivanova (an expert from Russia). In her opinion, by the end of 2018 Bitcoin could reach the $50 thousand mark. A number of experts go even further and predict a more significant increase to $100,000. If such forecasts are realized, Bitcoin's capitalization could exceed $1.5 trillion. However, many of these scenarios are simply fantastic and most experts are still inclined to believe that another cryptocurrency boom will not happen in 2018.

When investing in BTC, it is important to remember the negative factors affecting the popularity of Bitcoin. This cryptocurrency may in the near future be supplanted by direct competitors, for example, Ethereum. As for other cryptocurrencies, they are just gaining momentum and cannot yet compare with Bitcoin in terms of capitalization. Significant changes can occur if there is a sharp collapse in the Bitcoin rate due to negative news or other factors mentioned above.

The level of capitalization, that is, the market value of assets, in the field of cryptocurrencies is one of the most important indicators for the further movement of the market. Some see this as public recognition, which has a positive impact on cryptocurrencies. Others note this as a reduction in exchange rate volatility, which is also important for the use of digital assets.

What is cryptocurrency capitalization

The term capitalization itself refers to the market value of all assets, for example, a company. If we talk specifically about a company, then capitalization can be calculated using the value of shares. For example, a company has issued one thousand shares of ten rubles each. Accordingly, the capitalization of this organization is 1000 * 10 = 10,000 rubles.

Not all experts agree that similar methods can be used in relation to cryptocurrencies, but gradually the “cryptocurrency capitalization” indicator has become one of the main indicators of market movement. That is, to find out the level of capitalization of any cryptocurrency, you need to multiply the total number of coins by its value. This way you can find out the amount of cryptocurrencies and the capitalization of any coin.

Bitcoin is the cryptocurrency with the highest capitalization level. It occupies more than 40% of the market. Second and third places are occupied by Ethereum and Ripple coins.

The capitalization of all cryptocurrencies is, accordingly, the cost of all existing coins. This information is not secret. Some services, such as CoinMarketCap, provide such information.

Cryptocurrency market capitalization in 2018

After the cryptocurrency boom of 2017, the beginning of this year was marked by a high level of capitalization. It amounted to more than $700 billion. However, within six months the indicator dropped significantly.

At this point, in June 2018, the value of all cryptocurrencies has fallen below $300 billion. On June 17, the capitalization of cryptocurrencies was less than $280 billion.

Lost Cryptocurrency

Many generated digital assets are lost untimely, that is, they are not used in any way. Conventionally, someone could lose faith in cryptocurrency in 2014 and throw away the hard drive with digital currencies. In addition, no one still knows about the fate of the million bitcoins of Satoshi Nakamoto, who created bitcoin.

Cryptocurrency issue and rate

Thus, the capitalization of cryptocurrencies is influenced by two main indicators - issue (how many coins have been issued) and their value (rate). It is necessary to take into account the amount of cryptocurrency mined through mining. But there are also digital assets that are issued simultaneously, like the NXT currency. In this case, the level of capitalization depends only on the exchange rate.

The rate, in turn, depends on many factors: from the behavior of traders and the regulation of cryptocurrencies by regulators to a lot of news and hacks of cryptocurrency trading platforms.

Why monitor capitalization?

Capitalization is an important indicator, primarily for reducing exchange rate volatility. By the way, changes worth hundreds of millions of dollars will be required to affect Bitcoin. Small cap cryptocurrencies will require significantly less funds. Therefore, there are cases when cryptocurrencies with small capitalization can fall by half or, on the contrary, rise. For example, last year Bitcoin rose 15 times, and Ripple - 17 times in just one month - December.

In addition, the level of capitalization may also indicate the public acceptance of cryptocurrencies, which is important information for traders.