7/25/2023 0 Comments Compare crypto coins market capProof-of-Stake blockchains like Avalanche validate their network’s transactions with validators, akin to Bitcoin’s miners but using monetary power instead of computing power. Avalanche (AVAX)Īvalanche (AVAX) token holders can vote on the amount of staking rewards validators receive. ![]() While the Fed uses interest rate hikes to bring inflation down, cryptocurrencies have diverse approaches. This is why having an inflation control mechanism is so important. ![]() That meant consumers have to pay 9.1% more (in aggregate) for products and services than the previous year. When the Federal Reserve injected $5T worth of stimulus to address the economic crisis wrought by the Covid-19 pandemic, the inflation rate, also known as CPI, jumped to 9.1% in July 2022, a 40-year high. The Fed increased its balance sheet by $4.6 trillion from March 2020 to May 2022. In the last two years, from 2020 to 2022, it has become clear what happens when central banks have to pump money into an economy. Different Cryptocurrency Inflation Controls It is also where inflation control happens. In other words, the difference between market cap and fully diluted market is the difference between circulating token supply and its maximum supply. If we were to calculate that number with the price of AVAX we would arrive at a fully diluted market cap:ħ20 million AVAX (maximum supply) x 27.67 (price per AVAX) = $19.95 billion fully diluted market cap In the AVAX example, 284.9 million AVAX is only 40% of its maximum supply of 720 million AVAX. This is why most cryptocurrencies do not fully release all available coins. The same logic applies to the circulating supply of cryptocurrencies. Such a drastic difference in availability makes aluminum much cheaper than gold. In contrast, aluminum is concentrated at 82,300 ppm in the Earth’s crust. For instance, gold can be found in the Earth’s crust at 0.004 parts per million (ppm). This is a reflection of the economic law of supply and demand. The more assets are available for trading, the less valuable they are. This ranks Avalanche (AVAX) 12th on the market cap listing. Therefore, AVAX market cap is the following:Ģ84,926,959 AVAX (as circulating supply) x $27.67 (price per AVAX) = $7.8 billion market cap Each of those AVAX coins is priced at $27.67, as of August 2022. For example, the Ethereum alternative smart contract platform, Avalanche (AVAX), has 284,926,959 tradable AVAX coins. ![]() We calculate it by multiplying the number of tradable coins by the price of each coin. Market cap is best viewed as cryptocurrency’s total tradeable value. Such a dynamic makes all the difference on how traders approach certain coins over others. In other words, a market cap is not calculated by a cryptocurrency’s total supply, but by its circulating supply.Įvery cryptocurrency has different circulating supplies, and some don’t limit maximum supply. This is the value of all the coins or tokens available for purchase on the market. The most common way to rank cryptocurrencies is by using their market capitalization.
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