One of the most common mistakes new crypto investors make is judging a coin by its price. A token worth a fraction of a cent looks "cheap" next to one worth tens of thousands of dollars — but price per coin tells you almost nothing on its own. The figure that matters for comparison is market capitalisation.
The formula
Market cap is simply:
Market cap = price × circulating supply
Two coins can have wildly different prices yet similar market caps, because one has far more units in circulation. A coin at $0.01 with 100 billion units in circulation has a $1 billion market cap; a coin at $1,000 with one million units has the same. Price alone hid that completely. Our market cap calculator lets you run this both ways — including the popular "what if this coin reached the price of another" comparison, which almost always reveals how much new capital that would actually require.
Three kinds of supply
Supply is where a lot of confusion lives, because there are three different numbers:
- Circulating supply — units available and in public hands right now. This is what market cap uses.
- Total supply — units that exist, minus any that have been verifiably burned, including those not yet released.
- Maximum supply — the hard cap on units that can ever exist. Some coins, like Bitcoin with its 21 million cap, have one; others have no maximum at all.
The gap between circulating and maximum supply matters because tokens not yet in circulation will usually enter the market over time. If a large share is still locked up, future selling pressure can weigh on the price even if demand stays flat.
Fully-diluted valuation
That future supply is what fully-diluted valuation (FDV) captures:
FDV = price × maximum supply
When a project's market cap is small but its FDV is enormous, it is a signal that a great deal of supply is still to come. That is not automatically bad — but it is information you want before assuming today's market cap is the whole story.
Why rankings use market cap
When you browse our live crypto prices, coins are ranked by market cap, not by price. That is the convention across the industry because market cap is the closest single proxy for the relative size of a network. A larger market cap broadly implies more capital committed and, often, deeper liquidity — though it never guarantees safety or future returns.
What market cap does not tell you
Market cap is useful but blunt. It does not measure how much real money has flowed into an asset — a thinly traded coin can show a large market cap on very little actual buying. It says nothing about the quality of the underlying project, its team, or its tokenomics. And reported circulating-supply figures can vary between data sources. Use market cap to size things up, then look deeper before drawing conclusions.
This guide is general education, not investment advice. A large or small market cap is not a recommendation to buy or sell. Crypto assets are highly volatile. Please read our disclaimer, and see our methodology for where supply and price data come from.
Related glossary terms