Definition ∞ Market cap analysis involves evaluating digital assets based on their total market capitalization, which is the current price multiplied by the circulating supply. This analytical approach helps investors gauge the relative size, dominance, and potential for growth of different cryptocurrencies. It provides a broad overview of an asset’s market standing.
Context ∞ Market cap analysis is a fundamental tool for understanding the structure and hierarchy of the digital asset market. Discussions often compare assets across different market capitalization tiers to assess their risk-reward profiles and investment suitability. While a significant metric, it is frequently considered alongside other factors to form a comprehensive market assessment.
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