What Are The Two Most Popular Cryptocurrencies This Month By Market Cap?

Last Updated September 10th 2020
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If you’re wondering what are the two most popular cryptocurrencies by market cap, read on. In this article, we’ll be answering the question ‘what is cryptocurrency market cap’ and explaining which most popular cryptocurrencies have secured the top spots.  

The world of cryptocurrency can move fast. Whether you’re an experienced trader or taking your first steps into the sector, it can feel like a full-time job keeping track of your cryptocurrency by market cap. 

Since the launch of Bitcoin in 2009, there are now over 6,000 digital assets in circulation. As an investor or speculator, it’s important to know what the most popular cryptocurrencies are by market cap – whether they’re already in your portfolio or you’re considering adding them.   

What Is the Cryptocurrency Market Cap?

The term ‘market cap’ is short for market capitalization. This refers to the total market value of an asset (in this case, cryptocurrency) and isn’t the same as the price. 

Cryptocurrencies are famously volatile, so the market cap can change quickly. In fact, the total cryptocurrency market cap hit $380 billion in August this year – a recovery of almost $180 billion since April. 

You can work out the market cap of a cryptocurrency using the following sum: the total number of coins or tokens in circulation x the current price of each coin. 

What Are The Two Most Popular Cryptocurrencies This Month By Market Cap?

  • Bitcoin

In terms of market cap, Bitcoin (BTC) has always been the most popular cryptocurrency on the global market. Its market cap this month is currently $219,896,327,763.

Using the sum we mentioned above, this can be calculated by multiplying the number of Bitcoin tokens in circulation (18,476,581 BTC) by the price ($11,901.35). 

  • Ethereum

In second place is Ethereum, a blockchain platform which uses ‘smart contracts’ to carry out digital transactions. Its native currency is known as the Ether (ETH) and its current market cap is $51,729,193,018. 

This can be calculated by multiplying the number of Ether tokens (112,419,302 ETH) by the price ($460.15). 

 

Why are Bitcoin and Ethereum so popular?

In short, Bitcoin and Ethereum are popular for different reasons. Bitcoin itself has digital scarcity (as a limited number of Bitcoins exist), so retains a large market cap due to this scarcity value. 

 

Ethereum has utility value as well, as while a limited number of coins can only ever be produced, but its network can be utilised for hosting ERC 20 tokens (among others).

 

 

Being the oldest and largest cryptocurrencies, Bitcoin and Ethereum have had the most time to mature in the market. Simply put, Bitcoin is the market leader because it was the first cryptocurrency to perform its desired function.  

When it comes to coin market cap though, Ethereum has a unique advantage in increasing the volume of its market cap due to the value of its smart contract platform. While the market cap of Ethereum currently sits at around $26 Billion USD (as at July), the total market cap of ERC-20 tokens is now $29 Billion USD. The point at which the market cap value of Ethereum was eclipsed by the ERC-20 tokens on its platform was formerly known as a “Flippening” i.e. whereby the total market cap of a given tradeable cryptocurrency overtakes the market cap of another (at the time more popular) cryptocurrency or stock.

 

The real question is, when it comes to cryptocurrency why does popularity matter so much?

Why Does Cryptocurrency Market Cap Change?

The biggest factor affecting cryptocurrency market cap is the price of each virtual asset. As cryptocurrencies can be volatile, this price can fluctuate hugely according to the current market. 

Let’s take a look at Bitcoin. Over the last six months alone, the price of Bitcoin has varied from lows of $3,967.32 on March 16th to highs of $12,470.6 on August 17th

This level of fluctuation is admittedly extreme, as investors responded to the market uncertainty caused by COVID-19. However, it wasn’t the first time Bitcoin has hit a low of around $3,000. It also experienced a slump in 2018. 

Does Bitcoin Halving Affect Market Cap?

One factor which influences the market price of Bitcoin is the phenomenon known as ‘Bitcoin halving’. Due to happen every four years, this is when the reward for mining new blocks is cut in half. 

Bitcoin halving occurs to control the supply of BTC. There is a fixed supply of 21 million Bitcoins, so halving (also known as ‘halvening’) helps to slow down the generation of new tokens and steady its inflation rate.

Historically, Bitcoin halving has driven up the price of the cryptocurrency. After the first Bitcoin halving in November 2012, investors saw a staggering price increase of 10,218% over the course of just one year. 

Ethereum, on the other hand, has an infinite supply of Ether tokens. While the fixed supply of Bitcoin is likely to increase demand (and therefore the price) over time, Ethereum is not affected by regular halving.

When the Bitcoin vs Ethereum flippening occurs, all cryptocurrencies will be indexed against it

 

Currently, many traders often use Bitcoin as a trend setter for the general performance of the market. If the Bitcoin vs Ethereum flippening occurs, it could make the market more volatile as Ethereum itself is valued both by itself and its ERC-20 tokens. While cryptocurrencies are generally volatile, Bitcoin has the ability to smooth things out by ensuring that its value isn’t tied to the utility of its network for any other purpose than to host the Bitcoin ledger. Ethereum’s network is generally more volatile than Bitcoin as its ledger is used for things other than hosting Ethereum’s network. Ethereum’s network hosts lots of other use cases, and often not just ERC-20 token transactions. Sometimes, the Ethereum network can be clogged, leading to significant spikes or drops in the value of the token. This happened previously with the website Cryptokitties, when in 2017 a significant network clogging lead to a sudden spike and drop in Ethereum’s price.

 

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