Do these 3 things before closing this tab:
1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesA token’s price tells you what one unit is quoted at; its market capitalization estimates the value of all units counted as circulating. A low-priced token is not necessarily cheaper than a higher-priced one: supply can differ enormously. To compare crypto valuations, check the price, the provider’s circulating-supply estimate, and fully diluted valuation (FDV)—and remember that none of these figures measures cash invested or guarantees what you could sell for.
What market cap and token price mean
Token price is the quoted price of one unit. Market capitalization is generally calculated by multiplying that price by an estimate of the circulating supply. CoinGecko states the formula as “Market Cap = Circulating Supply × Current Price Per Token.”
For example, in a hypothetical comparison, Token A priced at $2 with 10 million units counted as circulating would have a $20 million market cap. Token B priced at $0.20 with 200 million circulating units would have a $40 million market cap. Token B has the lower unit price but the higher market cap. These figures are arithmetic examples, not current market data.
Why circulating supply needs a source
Circulating supply is not always a directly observable, universally agreed figure. Providers estimate how many units are available in the market, and their definitions and verification methods can differ. CoinGecko says it obtains supply information from token teams and verifies it; its methodology describes querying block explorers for proof-of-work coin supply and deducting identified locked tokens from total supply for smart-contract tokens. See CoinGecko’s methodology.
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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →CoinMarketCap describes circulating supply as an approximation of assets in the market and public hands, and distinguishes it from total and maximum supply. Its categories and verification process are described in CoinMarketCap’s methodology. When quoting market cap, name the provider and its supply basis rather than presenting the estimate as a universal fact. Prices and supply estimates also change over time.
Three supply terms to distinguish
- Circulating supply: units the provider counts as circulating. Check how it treats locked, reserved, or team-held tokens.
- Total supply: units that exist under the provider’s definition, which may include units not counted as circulating.
- Maximum supply: a stated upper limit, if the token has one. Some tokens have no defined maximum.
How market cap differs from FDV
Fully diluted valuation uses the current price multiplied by a broader supply figure—typically total supply or maximum supply, depending on the provider’s definition. CoinMarketCap, for example, describes FDV as maximum supply multiplied by price. Because providers can use different supply definitions, check the stated basis before comparing FDVs.
FDV is a hypothetical valuation at today’s price, not a forecast. It does not establish that all tokens will be issued, unlocked, or sold at that price. To understand whether more units could enter circulation, look for reliable project documentation about issuance and unlock schedules; do not infer a guaranteed price decline from a high FDV alone.
A practical checklist for comparing two tokens
- Use one provider and timestamp where possible. This makes the quoted prices and supply assumptions more comparable.
- Compare unit prices. Treat each as the price of one unit, not as evidence that the token is cheap or expensive overall.
- Check circulating supply. Review what the provider counts, including its treatment of locked or reserved tokens.
- Compare market caps. Read the figure as price multiplied by the provider’s estimated circulating supply.
- Inspect total and maximum supply. Note whether a maximum exists and whether the figures are based on total or maximum supply.
- Check FDV and token releases. Identify the supply assumption behind FDV and consult reliable documentation for planned issuance or unlocks.
- Consider liquidity and trading conditions. A displayed quote may not be available for a large sale, particularly for a thinly traded token.
If two sites report different market caps, first compare their circulating-supply estimates and timestamps. A discrepancy does not necessarily mean one figure is a simple arithmetic error; the inputs or methodology may differ.
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What market cap cannot tell you
Market cap is not the amount of money investors put into a token, the cash available to sell at the displayed price, or an assessment of a project’s quality. Multiplying a reference price by counted units does not mean that equivalent cash entered the market or could leave it at that price. A token’s actual sale price can depend on liquidity, order size, volatility, and market conditions.
Market cap and FDV are valuation comparisons, not a complete investment assessment. Token design, supply changes, liquidity, volatility, and the assumptions behind the provider’s numbers all matter. The SEC’s Investor.gov glossary defines corporate market capitalization using share price and outstanding shares, but that corporate calculation is an analogy rather than a crypto circulating-supply methodology: SEC Investor.gov: Market Capitalization. The SEC has described bitcoin and ether as highly speculative and warned about volatility in guidance specifically concerning exchange-traded products tied to those assets; that statement should not be generalized into a claim about every token: SEC Investor Bulletin.
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