Understanding CoinMarketCap.com: A Site With Every Crypto’s Price on It and Where to Trade Them
CoinMarketCap.com is one of the more useful sites for getting an overview of the cryptocurrency market. Here are the basics of how CoinMarketCap works.
TIP: Some of the most important information to know when investing in a cryptocurrency is market cap (total coins in circulation compared to current price), price (in a fiat currency like USD and a major crypto like BTC), volume (fiat value of currency traded in a day), supply (circulating supply of a coin), social media buzz, and what exchanges it trades on. Guess what CoinMarketCap.com displays? You guessed it, all of that! That is why its arguably the most popular cryptocurrency related site.
NOTE: CoinMarketCap.com (CMC) isn’t an exchange, it is just a resource that helps you find coin prices and markets on which to trade specific crypto pairs like BTC/ETH. It is also one of, if not the, most popular crypto resource online. While it’s not an exchange itself, if you hit the “buy” button on any coin’s page you go to changelly.com (which is a type of exchange). Anyway, CMC is an important resource that goes hand-in-hand with any exchange, so I made an exception and put it in the exchanges section. If you were wondering why it is listed in that section, that is your answer.
Understanding How to Use CoinMarketCap.Com
First off, the main page to look at is the Cryptocurrency Market Capitalizations of All Cryptocurrencies (the home page).
This page lists the market cap, price, volume, supply, 24-hour price change, and a graph of that price over 24 hours.
- Market cap is total coins in circulation plus the current market price.
- Price is… the current average market price across exchanges.
- Volume is how much of a coin was traded in the past 24 hours.
- Supply is how many are in existence (multiply that by the price, and you get the market cap).
When you look at a coin, you want to look at market cap for an overview of its value (because this number avoids having the deal with figuring out not just the value of a coin, but the value of a coin compared to how many there are total circulating).
Price is rather self-explanatory, good when it goes up to sell, good when it goes down to buy.
Supply gives you an idea of how limited the current supply is (but not how many can be created in total, you need to research that per coin).
The 24-hour volume and change tell you about how the coin is performing now. Is it in a dip? Is volume lower than it usually is? These metrics can help you time buys and sells.
That is the gist; you can tweak the parameters by messing with the drop downs above the list.
Next, click on a coin, let’s click on Ethereum as an example.
Here we see a chart with lots of lines crossing over each other. The orange line on the chart is the price in Bitcoin. Bitcoin tends to go up, so the relative price of everything in Bitcoin is down. Don’t let that throw you off, but do consider the trajectory when trading between coins.
The blue line is a market cap, this matters for the reasons stated above. A coin whose market cap is growing is a coin that is doing well in general (as either the price is going up, or the supply is going down).
The green line is the price in USD. That should be the most obvious to look at.
Lastly, the chart below that is volume.
If the volume is high and market cap is growing on average, the coin is doing well. Meanwhile, you should expect all coins to be down compared to Bitcoin (for the time being).
A further piece of information that you might wish to know is that the tabs above the chart on a given coin’s page on a given coin’s page shows social media buzz and what exchanges it is traded on (under the markets tab). It also shows what crypto pairs you can trade (like ETH/BTC or ETH/USD).
Other information on the site should be easy to figure out with a little bit of work once you know these basics.
I’ll consider adding more information to this page, but for now, I thought it was important to explain the essentials (as it can be confusing to see all those lines and numbers and not understand what they mean).
coinmarketcap beginners tutorial.