In this article, we’ll tell you how we rank the cryptocurrencies on Coinranking. It will help you to evaluate the thousands of coins, knowing how we set up the list.
We rank all cryptocurrencies based on market cap. So, let us first explain what that actually means:
Market cap explained
The market capitalization, short said the ‘market cap’, is a widely used method to measure the value of a cryptocurrency. It helps to compare it accurately with other cryptocurrencies.
It’s calculated by multiplying the price by the circulating supply of a coin:
Market cap = Price * Circulating supply
Important about the market cap is that it’s not just based on the price, but also on the circulating supply. That’s important because of the following:
Why we use the market cap for our ranking
A cryptocurrency can be easily misjudged, when you’re just looking at the price, by thinking it’s expensive or very cheap; it can give an inaccurate measure of the total value.
Let’s explain with an example:
Coin A is worth $3 and has 300,000 coins in circulation; its market cap will be: 3 * 300,000 = $900,000.
Coin B is worth $5 and has 50,000 coins in circulation; its market cap will be: 5 * 50,000 = $250,000.
The overall value of Coin A is more than Coin B, even if the price of Coin B is higher than Coin A. And that’s why the market cap is a better indicator than just the price.
How we prevent manipulation in our ranking
To prevent ranking manipulation, we have a few more standards; cryptocurrencies have to pass these filters:
- Cryptocurrencies need to have a trading volume of 3 BTC during a 24 hour period.
- A new price coming in gets ignored when the last price is fifty times higher than the previous one.
- We need to ‘confirm’ the circulating supply.
For the overall statistics, the overview of the complete crypto market, we only calculate the coins passing these filters.
Every 60 seconds we calculate a volume-weighted average price of every coin (= the average price a coin is traded for in a day). For this calculation, we use data coming from hundreds of exchanges.
The supply data are provided by so-called block explorers, which are web tools that give detailed blockchain information about coins.