Market Composition

Definition ∞ Market composition refers to the constituent elements and their relative proportions that make up a particular financial market. This includes the types of assets available, the number and diversity of participants, and the distribution of market capitalization among different assets. Analyzing market composition helps in understanding the structure and dynamics of the market.
Context ∞ For digital assets, market composition analysis involves examining the distribution of market capitalization across different cryptocurrencies, the prevalence of stablecoins versus volatile assets, and the concentration of trading activity on various exchanges. News discussions may revolve around shifts in market composition, such as the growing dominance of certain altcoins or the increasing influence of institutional capital. This perspective is crucial for grasping the overall health and direction of the crypto economy.