Crypto Market Cap — Explained in Under 1 Minute
Crypto market capitalization shows how big a cryptocurrency really is.
The formula is simple:
Market Cap = Token Price × Circulating Supply
If a coin is $10 and 10 million tokens exist, its market cap is $100M. Platforms like CoinMarketCap and CoinGecko rank coins using this number.
Why Market Cap Matters
Compare projects fast: A $5B coin is obviously more established than a $500M one.
Portfolio guidance: Large caps like BTC/ETH = stability. Small caps = high risk, high swings.
Industry benchmarks: Crypto indexes like CMC100 use market cap to track the biggest players.
Circulating Supply vs Total Supply
Circulating: Tokens currently in the market.
Total/Max supply: Includes locked, vested, or future tokens.
Market cap only uses circulating supply because that reflects real demand.
Market Cap vs FDV
FDV = Current Price × Max Supply
FDV shows what a project might be worth if all tokens were released.
A low market cap but huge FDV = future dilution risk.
Bottom Line
Market cap helps you see the size, strength, and position of a crypto project — but it’s not enough on its own. Use it with FDV, token unlock schedules, liquidity, and volume to judge real value.
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