The second half of this decade saw a huge rise in both the importance and the demand of cryptocurrency. A form of investment, a route to turning your dreams to reality- cryptocurrency seemed to offer everything a person would desire. This increased interest in crypto led to various economic concepts being applied to the industry: market capitalization being one of them. In simplest terms, market capitalization is the result of a formula where the current market price (the price that is being offered for the sale and purchase of the currency) is multiplied by the total number of existing shares. Simple? Not that much! The market capitalization of cryptocurrency is a strong and established method of assessing its value. For an investor, value means everything. It forms the basis of their market investment in the short term. For example, 2 currencies having the same capitalization with one having less total coins in the market means that this currency is worth more per coin than the other one. In such a dilemma, which one would you rather buy? This is the same question that an investor faces. Investors have valuable deposits of money that they are willing to put into something they believe will help increase its value. As the nature of this clarifies, there is a risk involved. Market Capitalization helps determine the magnanimity of the risk: as a general rule – the higher the market capitalization of crypto, the lesser the risk is involved. Why? Stable and high-value crypto has strong partnerships in the industry and can afford securer, safer and much efficient management than its counterparts. Thus even if it loses some value, the overall impact shall be quite less. For example, losing market capitalization of $ 1000 from crypto with a total worth over 1 billion dollars is less problematic than losing 1000 dollars from crypto that has a total market capitalization of 10000 dollars. The percentage risk is higher. Thus, if you are considering an investment, make sure you realize how important and hard-earned your money is, and how easily it can go to waste by making an extremely risky choice: consider the market cap of the crypto before investing in!
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