Market capitalization (market cap) in both cryptocurrency and traditional stocks represents the total value of a given asset, but there are key differences between how it is calculated and used in each market.

In traditional stocks, market cap is calculated by multiplying the total number of a company's outstanding shares by its current stock price. It reflects the company's market value, providing a quick snapshot of its size and investment potential. Large-cap stocks tend to be stable, while small-cap stocks are often considered riskier but have higher growth potential. Market cap is often used to categorize companies into large, mid, and small caps.

In cryptocurrency, market cap is calculated by multiplying the total circulating supply of a coin by its current price. While it similarly measures the size of a cryptocurrency, it can be more volatile due to the speculative nature of the crypto market. Unlike stocks, where market cap often correlates with company fundamentals (revenue, earnings), a cryptocurrency’s market cap may not reflect its actual utility or technology adoption.

Additionally, crypto market caps are affected by factors like token burns, supply inflation, and sudden price swings, making them less stable indicators compared to stock market caps. This volatility highlights the difference in market maturity between stocks and cryptocurrencies.