The short version
Market capitalization is a token’s current price multiplied by its circulating supply. Fully diluted valuation (FDV) is an estimate that multiplies the current price by a selected total or maximum supply figure.
FDV estimate = price × selected total/max supply
These are valuation measures based on a price snapshot and a supply definition. Market cap is not the amount of cash invested, and FDV is not a forecast of future value.
A simple example
Suppose a token is priced at $0.005, with 600 million tokens circulating and a stated maximum supply of 1 billion.
$0.005 × 1 billion = $5 million FDV estimate
At that snapshot, the circulating supply is 60% of the selected one-billion-token basis, so the FDV estimate is about 1.67 times the market cap. That ratio describes the inputs—it does not predict that the price will drop by a particular amount.
Why supply definitions matter
“Circulating,” “total,” and “maximum” supply are not interchangeable. A project or data provider may treat locked tokens, burned tokens, treasury holdings, or tokens not yet released differently. Check which definition the source uses and whether it has an unlock schedule.
When comparing two websites, make sure their price timestamps and supply bases match. Different assumptions can produce different market caps or FDVs even when the displayed token price looks similar. For example, CoinMarketCap defines FDV using maximum supply ↗, while CoinGecko describes it using total supply, or maximum supply where applicable ↗. Use the specific source’s methodology when comparing figures.
What market cap does—and doesn’t—say
Multiplying the last or quoted price by circulating supply is a useful standardized snapshot. It does not mean that amount of money has been deposited into a project, that every circulating token could be sold at the same price, or that the market has enough liquidity to support a large order.
In a thin market, a small trade can move the quoted price. The CFTC warns people to be wary of thinly traded or newly created tokens and sudden social-media-driven price spikes; a market-cap figure does not measure those risks. Read the CFTC advisory ↗
FDV is not a price forecast
FDV holds the entered price constant while using a larger supply basis. It does not say all tokens will be released, when they might be released, who will receive them, or how demand and liquidity will respond. Supply changes can matter, but the FDV calculation alone cannot model those effects.
FadeIt’s crypto market cap and FDV calculator lets you enter the price and supply basis yourself. Treat its output as arithmetic to inspect—not as a fair-value estimate or recommendation.
Questions to ask before comparing tokens
- What exact price and timestamp is being used?
- How does the source define circulating and maximum supply?
- Are more tokens scheduled to unlock or be issued?
- How much liquidity exists near the displayed price?
- Are the figures being presented as descriptive metrics or as a promise about future value?
For another part of the trade math, see fees and slippage, explained.