What Is the Altcoin Market Cap: Definition, Calculation, and Practical Strategies

Author: Jameson Richman Expert

Published On: 2025-11-06

Prepared by Jameson Richman and our team of experts with over a decade of experience in cryptocurrency and digital asset analysis. Learn more about us.

What is the altcoin market cap? In simple terms, the altcoin market cap is the combined market capitalization of cryptocurrencies other than Bitcoin. This article explains how altcoin market cap is calculated, why it matters to traders and investors, how to use it to spot opportunities or risks, and practical strategies for trading altcoins. You’ll also find tools, reliable data sources, examples, and links to further reading and exchanges if you want to trade or research altcoins.


Table of contents

Table of contents

Definition and basic formula

The altcoin market cap refers to the total market value of all altcoins combined or a subset of altcoins (for example, top 100 altcoins, DeFi tokens, or meme coins). Market capitalization for an individual cryptocurrency is calculated as:

  1. Market cap = Circulating supply × Current price per token

To get the altcoin market cap, many analysts subtract Bitcoin’s market capitalization from the total crypto market capitalization, leaving the combined value of all non-Bitcoin cryptocurrencies:

  1. Altcoin market cap = Total crypto market cap − Bitcoin market cap

This metric helps quantify how much capital (in USD or another fiat) is invested in altcoins collectively and is useful for assessing industry cycles, investor sentiment, and risk appetite.

How to calculate altcoin market cap (step-by-step)

Follow these steps to compute altcoin market cap for a specific subset or the whole altcoin market:

  • Step 1: Choose the scope—are you calculating for all altcoins, top-100 altcoins, or a sector like DeFi?
  • Step 2: Collect circulating supply and current price data for each token in your scope. Reliable sources include CoinMarketCap and CoinGecko (see tools below).
  • Step 3: For each token, multiply circulating supply by price to get individual market caps.
  • Step 4: Sum the individual market caps to get the combined altcoin market cap.
  • Step 5 (optional): Compare this figure to Bitcoin’s market cap or historical values to analyze dominance and trends.

Example: If Token A has a circulating supply of 50 million and price $2 → market cap $100M; Token B supply 10 million price $5 → market cap $50M. Combined altcoin market cap for these two tokens = $150M.


Altcoin market cap vs. other market metrics

Altcoin market cap vs. other market metrics

Understanding how the altcoin market cap relates to other metrics improves decision-making:

  • Circulating supply — The number of tokens currently available in the market. Market cap uses circulating supply, not total or max supply.
  • Fully diluted valuation (FDV) — Price × max supply. FDV can be misleading for tokens with large locked or future allocations.
  • Bitcoin dominance — The percentage of the total crypto market cap that Bitcoin represents. Altcoin market cap is essentially the inverse component (total crypto − BTC).
  • Sector market caps — Subdividing altcoin market cap by sector (DeFi, NFTs, infrastructure tokens) reveals where capital flows are concentrating.

Why choose circulating supply for market cap?

Circulating supply best reflects the market’s current available liquidity. Max supply or total supply may include tokens locked for vesting or burn schedules, which overstates immediate market exposure.

Why altcoin market cap matters to investors

The altcoin market cap is important for several reasons:

  • Market sentiment gauge: Rapid inflows into altcoins (rising altcoin market cap) often signal increased speculative risk appetite and altseason phases. Conversely, shrinking altcoin market cap suggests BTC or stable assets are absorbing capital.
  • Risk and portfolio allocation: Allocations to small-cap altcoins are riskier but offer higher upside. Knowing aggregate altcoin cap helps allocate prudently across market-cap tiers.
  • Market cycle timing: Historical altcoin market cap trends help time entries — many altcoins outperform during broad capital rotation away from BTC.
  • Liquidity assessment: Large altcoin market caps generally imply more liquidity and lower slippage; small caps may be illiquid and volatile.

Real-world examples and case studies

Below are practical examples illustrating how altcoin market cap behaves and how traders use the metric.

Example 1 — Altseason signal

Scenario: Bitcoin dominance is 60% (BTC dominates), altcoin market cap is relatively stagnant. Over several weeks, Bitcoin dominance drops to 45% while total crypto market cap rises 20%. That shift means capital is moving into altcoins — an early altseason signal. Traders may reduce BTC exposure and allocate to select large-cap altcoins or growth projects.

Example 2 — Small-cap trap

Scenario: A specific altcoin’s FDV is $2 billion, but circulating supply yields a market cap of $150 million. The project announces token unlocks that will expand circulating supply. If altcoin market cap remains steady while unlocks increase circulating supply, price could compress significantly, hurting holders. Monitoring FDV versus circulating market cap prevents surprise dilution losses.

Example 3 — Sector rotation: DeFi vs. Infrastructure

Scenario: Over three months, DeFi token group market cap falls while infrastructure token market cap doubles — indicating rotation from yield-focused tokens to layer-1s and scaling solutions. Traders who identified the shift early rebalanced into infrastructure tokens for outperformance.


Best tools and data sources

Best tools and data sources

Accurate calculation and analysis of altcoin market cap depend on reliable data. Use reputable sources and cross-check when possible:

For trading and hands-on strategies, it helps to study market structure and backtest strategies using charting platforms and on-chain analytics. For strategy samples and TradingView examples you can read a practical guide here: TradingView strategy sample guide 2025.

Practical trading strategies using altcoin market cap

Below are actionable strategies and trade considerations using altcoin market cap as a core input.

1. Market-cap-tier allocation

  • Divide altcoins into tiers: large-cap (>$1B), mid-cap ($100M–$1B), small-cap (<$100M).
  • Allocate capital across tiers based on risk tolerance; e.g., conservative: 70% large-cap / 20% mid / 10% small; aggressive: 40/30/30.
  • Rebalance monthly or when altcoin market cap shifts significantly.

2. Altseason rotation strategy

  1. Monitor Bitcoin dominance and altcoin market cap trends. When BTC dominance falls and altcoin market cap rises, consider rotating a portion of BTC profits into high-quality altcoins.
  2. Focus on large- and mid-cap altcoins first, since they often lead the move and have better liquidity.

3. Relative-cap performance trading

Compare an altcoin’s market cap growth to its price growth. If price rises faster than market cap, it might be driven by supply reductions (burns). If market cap rises but price stagnates, additional circulating supply could be the culprit.

4. Market-cap-based stop-loss and position sizing

Use market cap and liquidity to size positions and set stops to limit slippage risk. Lower market cap = smaller position sizing and wider stops to account for volatility.

5. Cross-exchange liquidity checks

Before placing large orders, check an altcoin’s combined market cap and order-book depth across major exchanges to avoid adverse fills. For quick onboarding to exchanges, these referral links can help you sign up:

These platforms offer varying liquidity and trading tools; choose based on asset availability and fees.

Risks and limitations of using altcoin market cap

Market cap is a useful high-level metric but has meaningful limitations you should understand:

  • Misleading FDV: FDV (max supply × price) can be artificially large and not reflect immediate dilution risks.
  • Tokenomics complexity: Vesting schedules, locked supply, and inflationary issuance affects future market caps.
  • Price manipulation and low liquidity: Small-cap tokens can be manipulated; market cap based on recent trades may not hold under sell pressure.
  • Data inconsistencies: Different data providers may report different circulating supplies and market caps. Cross-check with project tokenomics and reputable aggregators.

How to mitigate these risks

  • Check on-chain explorers and official tokenomics for circulating vs. locked supply.
  • Use multiple data sources (CoinMarketCap, CoinGecko, official project pages).
  • Avoid blindly following FDV numbers; focus on circulating market cap and liquidity.
  • Consider using limit orders and staging entries for low-liquidity altcoins.

FAQs — Quick answers about altcoin market cap

FAQs — Quick answers about altcoin market cap

How often does altcoin market cap change?

Continuously. Market cap moves in real time as prices change. Aggregators update constantly, so use a live feed for trading decisions. For historical analysis, use daily or hourly snapshots.

Is total altcoin market cap the same as “crypto market cap”?

No. Crypto market cap includes Bitcoin. Altcoin market cap often refers to total crypto market cap less Bitcoin market cap, or the combined cap of non-Bitcoin tokens.

Can market cap be manipulated?

Yes — especially for low-liquidity tokens. Wash trading, market-making schemes, or large buys on thin order books can temporarily inflate perceived market cap.

Which is more important: price or market cap?

Both matter. Price alone is meaningless without supply context. Market cap provides scale and helps compare projects, while price determines immediate return potential. Use both together.

Conclusion and next steps

Understanding what is the altcoin market cap is essential for anyone who trades or invests in cryptocurrencies. It’s a powerful tool to gauge market sentiment, guide allocation, and time rotations between Bitcoin and altcoins. However, market cap should be used alongside other metrics—liquidity, tokenomics, on-chain activity, developer fundamentals, and macro signals—to make well-informed decisions.

For further reading on related topics and practical guides, check these detailed resources:

Finally, if you plan to trade altcoins, always verify tokenomics and liquidity, use reputable exchanges (see links above), and consider risk management techniques like position sizing, stops, and profit-taking rules. Educate yourself continuously and combine market cap analysis with technical and fundamental research for the best results.

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