What is the method to determine the total market capitalization of the Bitcoin market? When I look at the following site it says (at the time of writing) that the total market capitalization of Bitcoin is $125,927,574,809 AUD.  

Now I think you could do this by running through the entire history of transactions on the blockchain, adding them all up, and multiplying by the current price. But there is probably a better way. 

My question is: What is the method to determine the total market capitalization of the Bitcoin market?
"Bitcoin market cap(in AUD)" = "Number of bitcoins in circulation"   X   "Value of single bitcoin(in AUD)"

The same as a market cap of some company: "number of their shares" X "value of single share".

Market cap means what would be the money you get if you sell all the bitcoins at current price.

Number of bitcoins in circulation can be calculated by going through all blocks of the main blockchain and sum the bitcoin reward of each of them.