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What role does shares outstanding vs free float play in determining the market capitalization of cryptocurrencies?

avatarPeeyush kumar YadavNov 27, 2021 · 3 years ago1 answers

Can you explain the significance of shares outstanding and free float in determining the market capitalization of cryptocurrencies? How do these factors affect the overall valuation of digital assets?

What role does shares outstanding vs free float play in determining the market capitalization of cryptocurrencies?
Cryptocurrencies
Market Capitalization
Shares Outstanding

1 answers

  • avatarNov 27, 2021 · 3 years ago
    Shares outstanding and free float are two key factors that influence the market capitalization of cryptocurrencies. Shares outstanding refers to the total number of shares issued by a cryptocurrency project, while free float represents the shares available for public trading. The market capitalization of a cryptocurrency is calculated by multiplying the price per share by the total number of shares outstanding. However, the free float is a more accurate measure of a cryptocurrency's market value as it excludes shares held by insiders or locked up in long-term contracts. The free float reflects the supply available for trading, which can impact the liquidity and price volatility of the cryptocurrency. It is important for investors to consider both shares outstanding and free float when evaluating the market capitalization and potential investment opportunities in cryptocurrencies.

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