How Is Crypto Market Cap Calculated
We calculate a cryptocurrencys market cap by taking the cryptocurrencys price per unit and multiplying it with the cryptocurrencys circulating supply. The formula is simple: . Circulating supply refers to the amount of units of a cryptocurrency that currently exist and can be transacted with.
Lets quickly calculate the market cap of Bitcoin as an example. The Bitcoin price is currently $63,280 and there are 18.85 million BTC coins in circulation. If we use the formula from above, we multiply the two numbers and arrive at a market cap of $1.19 billion.
Should You Buy Bitcoin
In general, many financial experts support their clients desire to buy cryptocurrency, but they dont recommend it unless clients express interest. The biggest concern for us is if someone wants to invest in crypto and the investment they choose doesnt do well, and then all of a sudden they cant send their kids to college, says Ian Harvey, a certified financial planner in New York City. Then it wasnt worth the risk.
The speculative nature of cryptocurrency leads some planners to recommend it for clients side investments. Some call it a Vegas account, says Scott Hammel, a CFP in Dallas. Lets keep this away from our real long-term perspective, make sure it doesnt become too large a portion of your portfolio.
In a very real sense, Bitcoin is like a single stock, and advisors wouldnt recommend putting a sizable part of your portfolio into any one company. At most, planners suggest putting no more than 1% to 10% into Bitcoin if youre passionate about it. If it was one stock, you would never allocate any significant portion of your portfolio to it, Hammel says.
What Can You Do With Cryptocurrency
While it shares characteristics of both currency and investments, theres still debate among experts about whether cryptocurrency is clearly one or the other.
As its name suggests, you can use cryptocurrency to make purchases. But your purchasing power is limited crypto isnt yet widely accepted among retailers and other businesses.
That lack of widespread adoption, plus cryptos volatility, limits its use as a currency, says Roger Aliaga-Díaz, principal and senior economist with Vanguard Investment Strategy Group.
For many people, crypto is a type of alternative investment. Just as you can buy and trade stock in public companies, you can buy cryptocurrency with the hope that it will increase in value over time, allowing you to cash out for a profit at a later date. Some people invest in crypto less for the belief that it will become a popular currency and more as a bet on the blockchain technology behind it.
But classifying crypto as an investment is complicated, too. It doesnt quite fit the mold of a traditional stock or bond, and while cryptocurrencies do share characteristics of commodities like gold they can be bought and sold for cash and as derivatives based on expected future value they have no inherent physical value or use.
Where digital assets land, at the end of the day will be driven in part by regulation, both domestic and international, Former SEC Chairman Jay Clayton recently told CNBC.
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How Crypto Is Used
Crypto-assets were first developed as a digital form of currency, to be used as money. Some stores accept crypto as payment for goods and services, and some ATMs let you withdraw it as physical money. However, crypto is not legal tender in Australia and is not widely accepted as payment.
Crypto is more commonly used as a speculative, longer-term investment, as most people dont access their balance for everyday transactions.
How Are Crypto Prices Calculated
Crypto prices are calculated by averaging cryptocurrency exchange rates on different cryptocurrency trading platforms. This way, we can determine an average price that reflects cryptocurrency market conditions as accurately as possible.
Cryptocurrency exchanges provide markets where cryptocurrencies are bought and sold 24/7. Depending on the exchange, cryptocurrencies can be traded against other cryptocurrencies or against fiat currencies like USD or EUR . On exchanges, traders submit orders that specify either the highest price at which theyre willing to buy the cryptocurrency, or the lowest price at which theyre willing to sell. These market dynamics ultimately determine the current price of any given cryptocurrency.
CoinCodex tracks more than 350 crypto exchanges and thousands of trading pairs to make sure that our data is as reliable as possible.
Generally, cryptocurrency price data will be more reliable for the most popular cryptocurrencies. Cryptocurrencies such as Bitcoin and Ethereum enjoy high levels of liquidity and trade at similar rates regardless of which specific cryptocurrency exchange youre looking at. A liquid market has many participants and a lot of trading volume – in practice, this means that your trades will execute quickly and at a predictable price. In an illiquid market, you might have to wait for a while before someone is willing to take the other side of your trade, and the price could even be affected significantly by your order.
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How To Dodge The Bullet
If you are entering the world of cryptocurrency, naturally, you are going to need tools to protect yourself. First and foremost, if you are considering buying cryptocurrency from companies on ICO bases , read everything carefully. This might be much more profitable for them than for you. ICO is a way for companies to expand and grow by selling you cryptocurrency. Something like public funding. You buy tokens they use your money to expand. So again, read thoroughly and do your research. Are there any big investors involved? Is the information provided to you detailed enough?
In any case remember, that you should invest only in systems you fully grasp and understand. So do your research carefully and make sure you have all the ends covered before you make a final decision.
Cryptocurrency is still very young and has a lot of stability still to achieve. But nonetheless, it is a genius system that can offer our world an alternative approach to money, investing, banking and purchase in general. So its a good idea to dip into the subject, even if you are not looking to invest or buy. Keeping up with new technology is a great rule of thumb. This way you will always be in touch with the now and will be able to predict the tomorrow!
Featured image: The Telegraph
Things You Need To Know About Cryptocurrency
We have all heard the term cryptocurrency, but how many of us actually understand how it works? Better yet, how does regular currency work? We, the average people are very much used to the concept of money, without deeply researching how it works. And the word cryptocurrency can drive us nuts just because its confusing and we dont really grasp the concept. So lets turn all that around and see what we are dealing with here. Is it the currency of the future, or what? Here are a few key points you should know.
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How Does A Stablecoin Remain Stable
The most common way for a stablecoin to maintain its parity with its linked currency is for the coins managers to keep the same number of USD in reserve as they have coins issued.
This makes a stablecoin work in a similar way to a poker chip. Casinos issue chips to customers that represent a value thats equal to the amount of money they exchanged them for. When theyre finished playing, the customer can return to the cash desk and ask to change their chips back to real money. In the 21st century, online poker sites like those reviewed by PokerNews, use digital versions of tokens to do the same thing.
A stablecoin is like a digital poker chip that can be converted back into dollars, pounds, or euros at any time.
How Does This Affect Banking Customers
While cryptocurrencies are new and exciting, they simply cannot meet the demands of consumers. Cryptocurrencies cannot be used to secure a mortgage, a car loan, or any of the other financial needs you may have. For these forms of financial support, working with your local bank is imperative.
Keeping your cash in a bank allows you to have easy access to funds whenever you need it, and it wont be tied up in a currency investment that could drop in value at any given time. While it might mean the minor inconvenience of driving to your branch now and again, youll experience easier access to the services you need, along with better security for your hard-earned cash.
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What Is Cryptocurrency Mining
Principally everybody can be a miner. Since a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. Imagine someone creates thousands of peers and spreads forged transactions. The system would break immediately.
So, Satoshi set the rule that the miners need to invest some work of their computers to qualify for this task. In fact, they have to find a hash a product of a cryptographic function that connects the new block with its predecessor. This is called the Proof-of-Work. In Bitcoin, it is based on the SHA 256 Hash algorithm.
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You dont need to understand the details about SHA 256. Its only important you know that it can be the basis of a cryptologic puzzle the miners compete to solve. After finding a solution, a miner can build a block and add it to the blockchain. As an incentive, he has the right to add a so-called coinbase transaction that gives him a specific number of Bitcoins. This is the only way to create valid Bitcoins.
Bitcoins can only be created if miners solve a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miners invest, there is only a specific amount of cryptocurrency token that can be created in a given amount of time. This is part of the consensus no peer in the network can break.
How Can I Find Historical Crypto Market Cap And Crypto Price Data
You can find historical crypto market cap and crypto price data on CoinCodex, a comprehensive platform for crypto charts and prices. After you find the cryptocurrency youre interested in on CoinCodex, such as Bitcoin, head over to the “Historical” tab and you will be able to access a full overview of the coins price history. For any given coin, you will be able to select a custom time period, data frequency, and currency. The feature is free to use and you can also export the data if you want to analyze it further.
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How Secure Is Cryptocurrency
Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into “blocks” and time stamped. It’s a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that’s hard for hackers to tamper with.
In addition, transactions require a two-factor authentication process. For instance, you might be asked to enter a username and password to start a transaction. Then, you might have to enter an authentication code that’s sent via text to your personal cell phone.
While securities are in place, that doesn’t mean cryptocurrencies are un-hackable. In fact, several high-dollar hacks have cost cryptocurrency startups heavily. Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million in 2018. That made them two of the biggest cryptocurrency hacks of 2018, according to Investopedia.
Why Consider Using Crypto
More than 2,300 US businesses accept bitcoin, according to one estimate from late 2020, and that doesnt include bitcoin ATMs. An increasing number of companies worldwide are using bitcoin and other digital assets for a host of investment, operational, and transactional purposes.
The use of crypto for conducting business presents a host of opportunities and challenges. As with any frontier, there are both unknown dangers and strong incentives. Thats why companies venturing to use crypto in their businesses should have two things: a clear understanding of why they are undertaking that action and a list of the many questions they should consider.
This paper endeavors to provide you and your company with an overview of the kinds of questions and insights enterprises should consider as they determine whether and how to use crypto. So, if your company plans to participate in crypto, its important to think ahead, prepare, and engage in a thoughtful manner.
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Can I Store All Of My Cryptocurrencies In The Same Wallet
This is the golden question with the answer being sometimes, as it depends on the specific coins you are holding! For example, if you are holding Bitcoin only, you just need to find a wallet that is compatible with Bitcoin. However, what if you are holding Bitcoin and Litecoin?
Although they each have their own blockchain, it is possible to use a multi-currency wallet. These crypto wallets allow you to store different cryptocurrencies within the same wallet, which is much easier than having to use a different wallet for each coin.
However, it all depends on what the wallet can support. Interestingly, most tokens that are available were built on top of the Ethereum blockchain meaning that they are ERC-20 compatible. So, if you have lots of ERC-20 tokens, then they can sometimes all be stored within the same multi-currency wallet!
Other coins are not as flexible though, so always check with the wallet provider before you attempt to transfer funds across as if the coin is not compatible you will lose them forever!
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Why Crypto Is So Volatile
Crypto is worth what people are willing to pay for it.
This means that the price of crypto-assets can fluctuate at extreme levels based solely on market speculation. Factors that can influence the price of crypto include:
- media focus
- public announcements
- the actions of individuals who hold large amounts of a crypto or who influence the price through social media
Should You Invest In Cryptocurrency
This is a question no one can give a foolproof answer too. There are many different opinions concerning this point, so lets be honest. The downside is, cryptocurrencies dont generate cash flow, so many investors would not consider it to be a good destination for a large investment. Plus, as of today, they have no stability. And the exchange rate is jumping up and down every few years. Are they worth the trouble in the long run? Thats for you to decide.
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Is Bitcoin Bad For The Environment
The digital currency uses as much power as the Netherlands every year, with just 30 countries using more energy, according to researchers from the University of Cambridge.
Computers that mine bitcoin use up to 1% of the worlds electricity supply.
While some of bitcoins consumption is renewable , fossil fuels are still being used to power the mining and servicing of the digital currency.
This is why electric car manufacturer Tesla has stopped accepting crypto payments, causing bitcoin to fall.
What Is The Point Of Cryptocurrency Anyway
Cryptocurrency and blockchain are related concepts that are also very different. To understand the purpose of cryptocurrency and how it differs from blockchain technology we need to define both of them clearly.
Blockchains are a type of digital ledger, an umbrella term for the cryptographic and digital ledger technology needed to establish projects like Bitcoin, while cryptocurrencies are essentially digital money that run on the blockchain.
Before we can fully understand cryptocurrency, we need to define yet a few more terms.
Another term now commonly being thrown around is fiat currency. This is just money that the world is accustomed to, like the Dollar, Yen, Euro, etc. True blockchains are in the public domain. They are distributed, immutable, peer to peer, and decentralized, meaning large corporations dont have complete control over them.
Cryptocurrency has emerged to become an alternative to the fiat currencies of today. It has an unending list of potential uses once it is more widely adopted, and many in the crypto field think we have just scratched the surface when determining the overall worth of the technology.
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Bitcoin Is Back In The News Hackers Tried To Scam Twitter Users To Send Them Money Via Bitcoin Using High
While we’re all used to the idea of digital currency – spending and receiving money that isnt physically in front of us – cryptocurrencies, like Bitcoin, remain a mystery.
What is Bitcoin mining? How might we use money in the future? And can we even trust cryptocurrencies?
In this Q& A, we ask Dr William John Knottenbelt, director of the Imperial College Centre for Cryptocurrency Research and Engineering, to help us better understand this cryptic kind of currency.