Crypto Basics 1 min read
Market Capitalization
Also known as: Market Cap, Mcap
Current price multiplied by circulating supply. A rough proxy for how much capital is parked in an asset.
Formula
Market Cap vs FDV
| Metric | What it is | Why it matters |
|---|---|---|
| Market Cap | Price × circulating supply | What is tradable right now |
| FDV | Price × max supply | Potential sell pressure once all tokens unlock |
| Mcap / FDV ratio | Fraction of supply circulating | Low ratio → future dilution risk |
Caveats
- Low-float coins can show inflated Mcap with tiny liquidity.
- «Market cap rank» hides huge differences in depth between, say, ETH and the 50th coin.
- Always cross-check with 24h volume and order book depth.
Frequently asked
What is FDV?
Fully Diluted Valuation = Price × Max Supply. It shows the «if every token unlocked today» market cap. A huge gap between Mcap and FDV is a red flag (future sell pressure).
Is market cap the amount of money «in» an asset?
No. It's a theoretical number. You cannot sell the whole supply at current price — liquidity is always a fraction of Mcap.