A market cap is the entire value of all mined crypto coins in circulation. Otherwise known as market capitalisation, it is calculated by multiplying the existing price of a specific coin with the total number of that specific coin currently in circulation.
Market caps are particularly helpful for investors as they serve as a guide in terms of a coin’s stability in the market. Although cryptocurrencies are volatile in nature, coins with larger market caps are known to be more stable. Large-cap cryptocurrencies typically have values above $10 billion while mid-cap cryptocurrencies have values that range from $1 billion to $10 billion.
What is a small market cap?
Small-cap cryptocurrencies are those coins with a market cap of under $1 billion and are usually in the early stages of development. Investors are drawn to small market caps as they have the potential to provide the highest returns. Small-cap cryptocurrencies can be described as the hidden gems of the crypto market as they are in the initial phase of development and offer the hope of a huge return on investment. Small-cap cryptocurrencies tend to outperform large-cap and mid-cap coins historically, although they are more volatile and can be riskier investments.
Top 3 small caps for 2021
The top 3 small-cap coins for 2021 are currently Horizen, Qtum, and Mdex.
Horizen lies in first place and has a market cap of just above $1.01 billion, down 21.21% from the last week. Its unit price is $91.39 at the time of writing. Qtum holds second place with a market cap sitting at just over $1 billion, down approximately 19.74% from the last week. Its unit price is around $10.21 at the time of writing. Mdex takes third place fractionally with a market cap of just over $976 million, down approximately 12.59% from the last week. Its unit price is sitting around $2.14 at the time of writing, just pipping Revain and Nano to third place.
Overview of Total Market Cap
At the time of writing, the total crypto market cap is sitting at $1.64 trillion; a rise of 7.79% from the previous 24 hours with Bitcoin, Ethereum and Tether filling the overall top 3 spots.
Smart ways to invest
It is important for investors to work smartly when investing in cryptocurrencies. Investors should study the various coins on the crypto market to understand the utility it contributes to the world of cryptocurrencies. It is recommended to invest based on calculated risks, and this is only possible once you have a thorough understanding of the markets.
You must always remember that you should only invest what you are prepared to lose. With that being said, an excellent strategy for investors is to diversify their crypto portfolio to reduce their risk. You can try to invest in bundles where you spread your funds across different cryptocurrencies that are grouped together.
One option is to create a bundle of the biggest and most successful cryptocurrencies that you can use for a long-term investment. Another great idea is to invest in small-cap crypto assets before they become too popular. This enables you to buy small with potentially large profits – so the key is to act early.
You can also try Smart Contract bundles where you invest in those cryptocurrencies that enable smart contract functionality. With this, it is a good idea to look at those cryptocurrencies that are trying to challenge Ethereum’s dominance with blockchain technology.
Another smart investment is Payment bundles that enable users to invest in payment-focused cryptocurrencies that aim to compete with government-issued fiat currencies. These cryptos enable digital payments to be cheaper, faster and more global.
For crypto investors who are looking to diversify their portfolios, it is wise to consider the top 3 small-cap cryptocurrencies due to their potential for growth which leads to incredible profit margins. When diversifying your portfolio, always study the small-cap cryptos for their potential and invest based on calculated risks. Make sure to use established platforms like Wisly to track and analyse your small-cap investments, and get the most bang for your buck. Good Luck!