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Market capitalisation

The importance and value of bitcoin is often measured by its market capitalization. It results from the multiplication of the number of outstanding shares (coins) and the price per share (coin).

Currently Bitcoin is at a market cap of: $806,512,070,784

Why is Bitcoins size given in market capitalisation?

Market capitalization is the value of a company in the stock market. It results from the multiplication of the number of outstanding shares and the price per share. This indicator helps to compare the values of companies in the same sector. For this purpose, the MC is set about the profit. Different price/earnings ratios(= P/E) are then compared to identify possible over-or undervaluations of individual companies.

Despite Crypto, no other currencies value is given in market capitalisation

Is Bitcoin a currency?

Bitcoin is not a company and cannot be listed on the stock exchange. If it is not a company, is it a currency? Let's take a closer look at the definition of a currency in the dictionary. It states: A currency is a "sovereign monetary system of a state or currency area including all regulations to ensure monetary stability[...]."(Gabler Banklexikon) According to this definition, Bitcoin isn‘t a currency. It doesn’t belong to a state, nor are there any regulations "[...]to ensure monetary stability" (Gabler Banklexikon). The price and thus the value of a Bitcoin is, contrary to most conventional currencies, very volatile. It is determined solely by its supply and demand. But what is then?

Cryptocurrency Bitcoin

It is neither a company nor a currency. It belongs to the class of cryptocurrencies, which is a separate category: "Cryptocurrencies are digital (quasi) currencies with a mostly decentralized, always distributed and cryptographically secured payment system."(Business Encyclopedia) Market capitalization is therefore used to estimate and assess the economic importance of Bitcoin, even though it is not a company.