CryptoMarket basics: Market Cap and Liquidity
Market capitalization is the total value of all tokens of a particular crypto issued to the #cryptomarket. For example, if the price of one token is $100 and a million tokens have been issued, then the asset's market cap is $100 million.
Liquidity is the provision of tokens in stablecoins or other reliable coins, which allows the trading asset to be quickly exchanged for "real money".
On decentralized exchanges, liquidity is usually significantly less than the token's market cap. For example, the market cap can be $28M, while the liquidity is only $730K. In this case, a large sale of the token can greatly collapse the price of the asset and its capitalization.
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Market capitalization is the total value of all tokens of a particular crypto issued to the #cryptomarket. For example, if the price of one token is $100 and a million tokens have been issued, then the asset's market cap is $100 million.
Liquidity is the provision of tokens in stablecoins or other reliable coins, which allows the trading asset to be quickly exchanged for "real money".
On decentralized exchanges, liquidity is usually significantly less than the token's market cap. For example, the market cap can be $28M, while the liquidity is only $730K. In this case, a large sale of the token can greatly collapse the price of the asset and its capitalization.
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