If you are a new blockchain enthusiast or maybe thinking of trading cryptocurrencies but don’t have clue about some of the terms. This article is for you.
Here, Decentral Magazine provides you with a list of the most useful Crypto keywords.
Market Cap or more formally Market capitalization refers to the total dollar market value of a cryptocurrency. It is calculated by multiplying the total number of circulating supply by the current market price of one cryptocurrency.
Market Cap somehow defines the popularity of most cryptocurrencies, since it’s related directly with the price and supply.
Volume is the number of a specific cryptocurrency traded in the digital assets exchange during a given period of time. For every buyer, there is a seller, and each transaction contributes to the count of total volume. A clear example is having account A set a buy/sell for 1 BTC @ $4000. Once the trade is settled, it is considered a transaction. The volume will be $4000.
Volume is considered an important indicator, used usually in technical analysis and in measuring the relative worth of a market move. For instance, if the markets make a strong price movement, then the strength of that movement depends on the volume for that period. The higher the volume during the price move, the more significant the move.
Circulating supply is the number of coins or tokens that’s been mined or generated. It’s the approximate number that’s currently in general public’s hands and circulating in the market.
The amount of crypto coins that is already in circulation in addition to newly mined coins that are not in the market (minus any coins that have been verifiably burned) is the Total supply. Total supply is the total number of coins that is currently in existence however not all are circulating. For several reasons, there are coins that are reserved or locked and are not sold on the public market which doesn’t affect the coin price. Total supply is normally equal to or greater than the circulating supply.
It is the maximum number of coins that will ever exist for a cryptocurrency. There won’t be any more supply once a coin reaches its max supply cap. It is the maximum amount will ever exist in the lifetime of the cryptocurrency by mining or producing. For instance, the case of Bitcoin, which has Max Supply of 21 000 000 BTC.
There are several coins with infinite supply and the best example Ethereum. In this case, the value of a coin is not based on its scarcity but on Time preference.