What does market cap mean?
Market cap is shorthand for market capitalization. It is a measure of the value of a currency. It is also typically used as a quick way to compare the size of two crypto projects.
For instance, the market cap of Bitcoin is $422B while Ethereum's is $184B. Thus, Bitcoin has a significantly larger market cap than Ethereum.
Investors calculate market cap by multiplying Price x Circulating Supply. If you wanted to calculate Bitcoin’s market cap, you would multiply the price you would pay for a single bitcoin (~$22,100) by the number of bitcoins in circulation (~19,100,000 BTC). Thus, $22.1k x 19.1M = $422B.
Market cap can also be a relevant signal of the crypto project's stability. For example, an additional $4B would need to go into Bitcoin for its market cap to increase 1%. For this reason, investors do not anticipate currencies with large market caps to be as volatile as small cap cryptos like Litecoin ($7B market cap). However, as we have seen in 2022, crypto projects with large and small market caps can experience significant swings in value.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
Don't just take our word for it
Hear what trusted money experts say about why UTMA and UGMA accounts can be a smart way to invest for a child’s future.
There are some tax advantages to using UGMA and UTMA accounts… Since they’re in your child’s name, the accounts will be taxed according to their tax bracket… There are no contribution limits on UGMA and UTMA accounts.
Dave Ramsey
Personal Finance Expert
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Investing for your kid’s future
Dave Ramsey
Personal Finance Expert
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...you could consider opening an account where you can dive deeper with the kids by your side. The easiest way to do so is to open a custodial account, known as an UGMA ... or UTMA ... account.
Jill Schlesinger
Emmy winning Business Analyst
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Straightforward “starter” investing account for kids
JILL SCHLESINGER
Emmy winning Business Analyst
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You can give children money that can accumulate somewhat tax-free over time... I love them (UTMAs) because they were like, trusts that you didn't need lawyers to create.... I think it's one of the better tax breaks around though. I know hunting for tax breaks may not sound very exciting, but that's how you take care of your family.
Jim Cramer
CNBC Host
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Give children money that can accumulate over time
Jim Cramer
CNBC Host
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