The cryptocurrency market covers much more breadth than the traditional markets, especially when it comes to the lower capitalization levels. When it comes to determining the potential growth of a particular altcoin and more decisive market analysis, we have categorized the cryptocurrency market into eight different levels.
Here is how we refer to the various levels of capitalization within the crypto space:
- Mega >$200 Billion
- Large $10B - $200B
- Mid-Market $1B - $10B
- Small Market $100M - $1B
- Micro Market $10M - $100M
- Nano Market $1M - $10M
- Pico Market $100K - $1M
- Femto Market <$100,000
Mega >$200 Billion
The mega-market capitalization level is the highest capitalization level available in the cryptocurrency market. Cryptocurrencies that are in excess of $200 billion are included in this level. At the time of writing, only Bitcoin and Ethereum fall into this category.
Large $10B - $200B
The second-largest classification includes those cryptocurrencies that are traded between $10 billion and $200 billion range. These cryptocurrencies typically include the top twenty cryptocurrencies (by market cap), however, it is dependent on the current market cycle (bull/bear).
Projects that fall within the Mega and Large market capitalization levels are also typically considered the 'Blue-Chip' Crypto Projects as these cryptocurrencies are generally considered the most popular and stable (relative) of all cryptocurrency investments.
Mid-Market $1B - $10B
At any given time there are around 50–60 projects which fall into the mid-market level of market capitalization and this includes projects with a market capitalization of between $1 billion to $10 billion.
These cryptocurrencies are considered to have a much higher degree of volatility than large and mega capitalization and offer the investor but also offer an opportunity for high growth projects.
Small Market $100M - $1B
At any given time there are around 150–200 cryptocurrency projects which fall into the small market capitalization level. Within the small-market capitalization is where we start to find cryptocurrencies with large growth potential and potential for an excellent return on investment. Although this category offers a higher potential for growth, they also have the potential for high volatility and risk.
Micro Market $10M - $100M
There are anywhere between 500 and 800 crypto projects which fit into the Micro-Market level and the prices for these projects can range anywhere from a couple of hundred dollars to fractions of a penny.
It's within this category we find the largest proportion of what is commonly referred to as 'penny cryptos'. The micro-market includes projects with a market capitalization of between $10 million and $100 million. These are cryptocurrencies that are often traded under one penny. While many of these coins have the potential for massive percentage gains given their low value, they are also highly volatile.
Nano Market $1M - $10M
Market Capitalization between $1 million to $10 million is considered the Nano Market. There are anywhere between 700 to 1,000 cryptocurrency projects which fit into this level.
It's within this market capitalization level some of the world's best-performing cryptocurrencies have first entered the market.
Pico Market $100K - $1M
There are generally around 500–700 cryptocurrency projects which fit into the Pico market at any given time. Just one level up from the lowest market capitalization level, Pico market capitalization is between $100,000 and $1 million dollars. Cryptocurrency projects within this cryptocurrency level are generally considered very high risk and susceptible to extreme volatility.
Femto Market <$100,000
This is the smallest level of cryptocurrency classification and is typically too small for most investors to be concerned with. These are cryptocurrency projects which have less than $100,000 market capitalization and are often projects which have been abandoned. Generally, projects found within this level are considered extremely high risk and considered by the market to be sh*t (or abandoned) coins.
Importance of Market Cap Levels
Market capitalization (market cap) is an essential metric that investors use to evaluate the size and performance of a cryptocurrency. Market cap refers to the total value of a cryptocurrency, which is calculated by multiplying its current price by its circulating supply.
Reasons why market cap levels are important:
- Reflects the size of the cryptocurrency: The market cap provides an idea of how big a cryptocurrency is and how much investment is backing it. Generally, larger market-cap cryptocurrencies are more established, have more liquidity, and are less volatile than smaller market-cap cryptocurrencies.
- Indicates the popularity of the cryptocurrency: Market cap reflects the overall popularity of a cryptocurrency. A higher market cap indicates that more people are interested in investing in that particular cryptocurrency.
- Helps in identifying potential opportunities: Market cap levels can provide valuable insights for investors. A growing market cap can indicate potential growth opportunities, while a decreasing market cap may suggest that the cryptocurrency is losing popularity or encountering challenges.
- Can be used for diversification: By investing in cryptocurrencies with different market caps, investors can diversify their portfolios and manage risk.
However, it's important to note that market cap is just one metric to consider when investing in cryptocurrency. Other factors such as team, technology, and adoption rates are also important when it comes to evaluating a cryptocurrency.
Benefits of Investing in Small Cap Crypto
Investing in small-cap cryptocurrencies can potentially offer several benefits, such as:
- Higher growth potential: Small-cap cryptocurrencies have a smaller market capitalization, which means they have a higher growth potential than larger, more established cryptocurrencies. This is because smaller cryptocurrencies have more room to grow, and a relatively small investment can have a significant impact on their market cap.
- Early investment opportunities: Investing in small cap cryptocurrencies can provide early investment opportunities in new and innovative technologies. These early investments can potentially yield high returns as the technology gains popularity and adoption.
- Diversification: Investing in small cap cryptocurrencies can help diversify an investor's portfolio, reducing the overall risk exposure. Small cap cryptocurrencies are typically more volatile than larger, more established cryptocurrencies, so they should be considered as part of a diversified portfolio.
- More potential for price discovery: Smaller cryptocurrencies are generally less well-known than larger ones, which can lead to inefficiencies in pricing. This can provide more opportunities for investors to find undervalued assets and take advantage of price discrepancies.
- Greater community engagement: Small-cap cryptocurrencies often have a strong and dedicated community that is passionate about the technology and its potential. This engagement can lead to more significant innovation and development in the technology, potentially increasing its long-term value.
It's important to note that investing in small-cap cryptocurrencies comes with higher risks due to their volatility, lack of liquidity, and potential for fraud. Therefore, investors should conduct thorough crypto research and analysis before investing and carefully manage their risk exposure.
Categorization by market capitalization is one method to better understand the makeup of the cryptocurrency market. These levels also help to classify and identify projects with the potential and trajectory for growth.
Frequently Asked Questions (FAQ)
What is Micro Cap Crypto?
Micro-cap crypto refers to cryptocurrencies with a small market capitalization, usually a range below $10 million to $100 million. These cryptocurrencies are often relatively new and unknown in the market, with low trading volume and liquidity. They can be highly volatile, with prices prone to significant fluctuations due to their small market size and lack of widespread adoption.
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Profitably Invest in the Crypto Market
When it comes to investing in cryptocurrency, some of the best cryptocurrency investments have been within the small market cap cryptos. These are projects with very low market capitalization and massive adoption potential. These small market-cap projects have tremendous growth potential and are often referred to as small-cap gems.
With over 10,000 actively traded cryptocurrencies and it's often difficult to separate the wheat from the chaff. Join us as we research and publish our findings when looking for the next small cap gem.
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