How crypto market cap works
Market capitalisation is circulating supply multiplied by current price. It is the standard measure of a project’s relative size, the way you compare a top-ten coin to a micro-cap on the same scale. A $2 price tells you nothing on its own; the same $2 across 100 million coins is a $200 million project, across 100 billion coins it is a $200 billion project. Always read price next to supply.
Worked example
Coin A trades at $50,000 with 19 million coins in circulation, a market cap of $950 billion. Coin B trades at $0.01 with 500 billion coins, a market cap of $5 billion. Coin B looks cheap per unit but is far larger and would need a 190x move to reach Coin A’s valuation. Unit price is a vanity number; market cap is the comparable one.
Circulating versus fully diluted
Market cap uses circulating supply, the coins available now. Fully diluted valuation uses max supply, including tokens not yet unlocked. A coin with a small circulating cap but a huge locked supply can face years of sell pressure as tokens vest. Check the tokenomics before assuming a low cap means upside.
Why it matters
Market cap frames realistic expectations. A $200 billion coin doing another 100x would have to exceed the value of entire asset classes; a small cap can, but carries the risk that comes with it. Size the position to the volatility, not to the dream.
Read the full breakdown in our crypto trading guide.
