Mid cap represents a metric derived from a mathematical formula used to assess the market value of a cryptocurrency falling within a market capitalization range of $1 billion to $10 billion.
Understanding Mid Cap
Market capitalization, a key metric for gauging the true value of a cryptocurrency, is typically divided into three categories: large cap, mid cap, and small cap. All digital tokens or coins listed on crypto-asset price tracking platforms fall into one of these categories. It serves as an indicator of a cryptocurrency's dominance and popularity.
Market Capitalization in Crypto
In the realm of crypto, market capitalization is often computed by multiplying the number of tokens by their price (total number of tokens x price of a token). Another metric to consider is the circulating cap, which reflects the difference between the total number of tokens currently in circulation and the maximum number that can be created.
Market Categorization in Crypto
Categorizing crypto projects based on their market capitalization essentially sorts them by popularity and risk level. It provides insight into the risk associated with investing in a cryptocurrency. Project strength, fundamental values, volatility, liquidity, and responsiveness are fundamental factors.
Mid-Cap Market Size
Mid-cap cryptocurrencies and tokens have market capitalizations ranging from $1 billion to $10 billion dollars. These projects are typically well-established, growing, and positioned for significant expansion in the foreseeable future. PolkaBridge, Litecoin, Monero, and Binance Coin are among the most prominent mid-cap currencies and tokens in this bracket.
Lower Than Large-Cap
While mid-cap cryptos have lower market capitalizations compared to large-cap counterparts, they often present higher growth potential. This is because some are still in the process of expanding their market or use cases. However, they can also experience significant depreciation, contributing to their perception as riskier investments.
Given that mid-cap cryptos lack the established status of large-cap ones, their value can fluctuate considerably.
Coin Potential
On average, mid-cap cryptocurrencies tend to perform well over time, making them a solid diversification option for portfolios. However, it's essential to recognize that not all coins have the potential to ascend to high caps or excel in the market.
Investing in a mid-cap coin may be advantageous in certain scenarios, but thorough research is necessary before committing funds. While some mid-cap coins, like MOVR, FLUX, and GALA, have exhibited robust fundamental growth, many have also disappeared entirely from the crypto market.
Do The Fundamentals
While market capitalization serves as an excellent gauge for assessing popularity and dominance, it's not the sole criterion to consider. When evaluating a cryptocurrency, other factors to examine include the project's core team, fundamentals, technical aspects, and value proposition.
Conclusion
Mid-cap cryptocurrencies occupy a vital position within the crypto market, representing projects with market capitalizations ranging from $1 billion to $10 billion. While they offer higher growth potential compared to large-cap counterparts, they also entail greater risk due to their evolving nature. Investors should conduct thorough research and consider various factors beyond market capitalization when evaluating mid-cap coins for investment, including project fundamentals, team strength, and technological innovations.
Also Read
What are Market Makers & Market Takers?
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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