How to Calculate Market Cap and FDV
Market cap is a cryptocurrency’s price multiplied by its circulating supply. Fully diluted valuation (FDV) multiplies the same price by the maximum supply, showing what the asset would be worth with every token in circulation.
On this page 10
- How to calculate market cap
- How to calculate FDV
- What the gap between market cap and FDV tells you
- Why a low unit price can mislead
- Does a rising market cap mean new money came in?
- Why circulating supply differs between sites
- What is total crypto market cap?
- Does a large market cap mean easy trading?
- A quick checklist for using market cap
- Sources
Market capitalisation is a cryptocurrency’s current price multiplied by its circulating supply: Market cap = Price × Circulating supply. Fully diluted valuation (FDV) multiplies the same price by the maximum supply: FDV = Price × Max supply. Market cap describes how big an asset is today; FDV shows how big it would be at today’s price once every token that can exist is in circulation.
Together they are the quickest way to compare coins with wildly different unit prices on a like-for-like basis. Both are snapshots built from price and supply data, though. Neither tells you how much money has been invested in a project or how much you could raise by selling every token.
How to calculate market cap
If a token trades at $4 and has 50 million units of circulating supply, its market cap is 4 × 50 million = $200 million. The figure moves whenever the price changes or new tokens enter circulation.
Use a price and a supply figure from the same moment. Data providers such as CoinMarketCap and CoinGecko sometimes estimate circulating supply differently, so the same coin at the same price can show different market caps and rankings on each site.
How to calculate FDV
FDV values every token, including those still locked or not yet minted, at today’s price. Consider a token priced at $5 with 20 million in circulation and a maximum supply of 200 million:
- Market cap: 5 × 20 million = $100 million
- FDV: 5 × 200 million = $1 billion
- Circulating ratio: 20 / 200 = 10%
For assets without a maximum supply, data sites usually base FDV on total supply instead. For an asset like Bitcoin, where most of the eventual supply is already in circulation, market cap and FDV sit close together.
What the gap between market cap and FDV tells you
A wide gap means most of the supply has not reached the market yet. In the example above, 90% of tokens are still to come. If demand does not grow as fast as supply, that overhang can weigh on the price. A “small” market cap on a new token with a low float is therefore not, by itself, a sign that it is cheap.
How fast the gap closes depends on the token unlock schedule. Two tokens with identical FDVs can face very different supply pressure if one releases team and investor tokens over four years and the other unlocks most of them in the first year. Our guide on reading tokenomics explains what to check.
Why a low unit price can mislead
A coin’s unit price says nothing about whether it is cheap or expensive; what matters is price times supply. Two hypothetical tokens:
- Token A: $0.01 price, 100 billion in circulation, $1 billion market cap.
- Token B: $100 price, 1 million in circulation, $100 million market cap.
Token A trades for a cent yet is ten times larger than Token B. The same arithmetic answers the perennial “can this coin hit $1?” question: an asset with 100 billion tokens reaching $1 would mean a $100 billion market cap, even with no new supply. The calculation simply makes the size of the target visible.
Does a rising market cap mean new money came in?
No. Price is set by the most recent trades, and that price is applied to every unit in circulation. If a token with 1 million units rises from $10 to $11, its market cap grows by $1 million, but nowhere near $1 million of fresh capital is needed for that move. In a thin market, a much smaller purchase can do it.
The same holds on the way down. Headlines saying “$100 billion wiped off crypto” describe a loss of valuation, not cash leaving the market. Every sale has a buyer; what changes is the price at which trades happen.
Why circulating supply differs between sites
Locked team tokens, project treasuries, tokens held in bridge contracts and coins in addresses whose keys are lost are all hard to classify. Providers apply their own methodologies, which explains many of the differences you see between data sites.
New projects also revise reported supply figures, which can move a token up or down the rankings without any change in price. If a chart shows a sudden jump in market cap, check whether it came from price action or from a supply update.
What is total crypto market cap?
The “total crypto market cap” quoted in the news is the sum of the market caps of every coin and token a data provider lists. Because providers include different assets, their totals never match exactly. The figure is useful for tracking the overall direction of the market, but it says little about any individual asset. Checking how much of the total is made up of stablecoins also helps put it in context.
Does a large market cap mean easy trading?
Not necessarily. Market cap measures size, not tradability. A token worth billions can still have a shallow order book on a particular exchange or trading pair. How much you can buy or sell without moving the price depends on order-book depth and spread, which our guide to trading volume and liquidity covers.
A quick checklist for using market cap
- Read market cap alongside circulating supply and FDV.
- If the circulating ratio is low, check upcoming unlocks.
- Note which data provider and which date a figure comes from.
- Do not compare very different assets on market cap alone; a stablecoin, a payments network and a governance token offer holders very different things.
- To see how much of the overall market Bitcoin represents, look at Bitcoin dominance.