Market capitalization is useful when evaluating coin because it can tell coins’ stability.
Market cap = Total circulating supply* price of each coin
For example, if bitcoin has 100,000 coins in circulation with each coin worth $2, then market cap of bitcoin is $200,000. A high or low market cap reveals the resistance of a coin to volatility. A coin with low market cap is more likely to be volatile, as holders of the coin with a small market cap are at risk of being crushed by larger traders. If various traders are selling coins at the same time, the value of coin can decrease to nothing in no time. Coins with large caps such as Bitcoin and Ethereum are not easy to manipulate as other coins with a small cap, so the price and value of the coin are likely to be more stable
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