Market Capitalization

Within the blockchain industry, the term market capitalization (or market cap) alludes to a metric that measures the relative size of a cryptocurrency. It is calculated by duplicating the current market price of a specific coin or token with the total number of coins in circulation.
Market Cap = Current Price x Circulating Supply
For instance, in the event that every unit of a cryptocurrency is being traded at $10.00, and the circulating supply is equivalent to 50,000,000 coins, the market capitalization for this cryptocurrency would be $500,000,000.
While the market cap might offer a few experiences about the size and performance of a company or cryptocurrency project, it is important to note that it isn't equivalent to money inflow. In this way, it doesn't address how much money is in the market. This is a common misguided judgment on the grounds that the calculation of market cap is straightforwardly dependent on price, yet truth be told, a relatively small variation in price might influence the market cap fundamentally.
Taking into account the previous model, two or three great many dollars might actually pump the cryptocurrency price from $10.00 to $15.00, which would cause the market cap to increase from $500,000,000 to $750,000,000. Notwithstanding, this doesn't mean there was an inflow of $250,000,000 in the market. As a matter of fact, the amount of money expected to cause such an increase in price is dependent on volume and liquidity, which are distinct however related concepts.
While volume connects with the number of assets traded within a certain period, liquidity is fundamentally the degree to which the asset can be immediately bought or sold without causing too much impact on the price.
Basically, a high-volume and liquid market won't be quickly controlled in light of the fact that there are many orders in the order book and perhaps a big volume of orders within the various scopes of price. This would result in a less volatile market, meaning that a whale would require large chunk of change to control the price fundamentally.
Interestingly, a thin order book of a low-volume market could be effectively overpassed with a relatively small amount of money, causing a critical impact on both the price and market cap.