How Does a Cryptocurrency Network’s Market Capitalization Relate to Its Perceived Security?

A network's market capitalization is often seen as a proxy for its perceived security, especially in PoW systems. A higher market cap suggests a higher price for the native coin, which, in turn, makes the total value of the block rewards and transaction fees greater.

This higher potential revenue incentivizes more miners to join, increasing the total hash rate. A higher hash rate means the economic cost of a 51% attack is higher, thus increasing the network's security.