What is market cap in crypto?

Circulating supply vs total supply — and why FDV matters.

TL;DR

Crypto market cap is price × circulating supply. You also need to watch fully diluted valuation (FDV) — what the market cap would be if all tokens were in circulation. Many projects look cheap until you check FDV.

Three supply numbers

Each tells a different story.

→Circulating supply — tokens in the market and tradeable
→Total supply — circulating + locked / treasury / vested (excludes burned)
→Max supply — the absolute cap (BTC: 21M; some have no cap)

Why FDV matters

FDV = price × max supply. If a token has 10% circulating today and 90% unlocking over 4 years, the $1B market cap is really a $10B FDV bet. Many 'low cap' tokens are actually high-FDV bets in disguise.

Market cap is not market value

Crypto market caps are nominal — you can't sell at market cap. Order books are thin. A $500M cap might have only $5M of buy-side within 10% of price. Selling $50M would crater it.

Worked example

Low market cap vs high FDV

TokenX at $2.00. Circulating: 100M. Max: 1B. Unlocks: 90% over 36 months.

1Market cap$2 × 100M = $200M
2FDV$2 × 1B = $2B
3Unlock schedule~25M tokens/month VC + team
4ImplicationConstant sell pressure; price needs continuous new demand to stay flat
5Compare to BTCBTC market cap ≈ FDV (96% circulating). No overhang.

Takeaway

Always check market cap AND FDV. Low cap with 10× FDV is structurally bearish unless demand grows 10×.

Common mistakes

What to avoid

!Comparing crypto market caps to stocks 1:1 — liquidity is far thinner
!Ignoring FDV — VC tokens routinely have FDV 5–10× cap
!Treating circulating supply as fixed — most have aggressive unlock schedules
!Buying 'low cap gems' without checking the vesting cliff

Self-check

Test yourself

Q1What's the difference between market cap and FDV?+

Market cap uses circulating supply; FDV uses max supply (full dilution).

Q2Why is low-circulating, high-max-supply usually bearish over time?+

Unlocks add constant sell pressure; demand must keep growing just to absorb the new supply.

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