Let's understand what market dominance is
Hello friends of Steem Alliance, my best wishes to all. Today I particularly want to talk to you about a topic that is usually not mentioned much but I consider it very important to understand it to have a better perspective of the crypto environment.
Let's talk about what capitalization dominance is in the crypto market and how it represents power within this financial world.
When we talk about market capitalization we are referring to the amount of money that a company or a cryptocurrency represents in a particular market. In the case of the crypto market, it is easy to know, it is even easy to know the capitalization of each coin.
This number is obtained by multiplying the quantity of coins in circulation by their price. To exemplify, if we calculate that Steem has a total of 550,112,000 units in circulation (according to coinmarketcap.com) and its current value is 0.2558, multiplying these values gives us the capitalization is 115,100,000 $.
If we compare with the current capitalization of the crypto market, which is about 1.6 trillion dollars, we will realize that those 115 million in the Steem market represent a small percentage of the total.
But if we are going to evaluate Bitcoin, for example, we will notice that there is a total dominance of almost 55% currently. That is, of those 1.6 trillion dollars that the crypto market represents, on average about 858.8 billion dollars, more than half are in Bitcoin.
This trend tends to increase, since it is the main currency, and it is where, most likely, if the Bitcoin ETF is approved, its valuation could increase and the percentage of dominance in the market capitalization could increase much more.
The same thing happens with Ethereum, the second most important currency, there are many who say that it is undervalued, which means that its price could rise much more from where it is now, and obviously increase its dominance.
In the case of Ethereum, it is the second in Dominance, and of all the money that exists in the crypto world, this asset represents almost 15%, which is a very important market share.
Dominance represents more than a number
Pages like coinmarketcap or coingecko tend to classify cryptographic projects based on their capitalization, but additionally, large investors will enter a market or not depending not only on the project itself but also on the market share it has, because it indirectly represents acceptance by investors.
Conclusion
I hope this post has given you something important in terms of knowledge. We never stop learning from being in this financial environment.
Bitcoin is by far the one that has the most dominance in the market, and therefore, the one that many prefer. There are even those who say that beyond Bicoin and Ethereum, cryptocurrencies are a Ponzi scheme, something with which I do not agree but everything is valid and each person is free to give their opinion.
For our part, it is up to us to learn daily and continue moving forward. Thank you for reading this far.
My promotion:
https://twitter.com/josevas217/status/1732477877264711723?t=-w0p5aJvuWGs77NXElcXbQ&s=19
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