Crypto market cap explained
The numbers on every price site, explained, and the traps hiding in them.
Market cap is a coin's price multiplied by the number of coins in circulation. It's a rough snapshot of total value, not the amount of money invested, and not what you could actually sell everything for. A low price per coin says nothing about whether a coin is cheap; compare market caps instead.
How market cap is calculated
Market cap = price per coin × circulating supply
If a coin trades at $2 and 500 million are in circulation, its market cap is $1 billion. Bitcoin, with about 20 million coins, would have a $2 trillion market cap at $100,000 each.
Why a $0.001 coin isn't "cheap"
A coin with trillions of units can have a tiny price and still be worth billions in total. For a $0.00001 coin with 500 trillion units to reach $1, its market cap would need to be $500 trillion, roughly the value of everything everyone on Earth owns, and about four times the value of every listed company combined. Compare market caps, never price per coin.
Fully diluted value (FDV)
FDV is the price multiplied by the maximum number of coins that will ever exist. If FDV is much bigger than market cap, many coins are still to be released ("unlocked") to early investors, teams or rewards. Those future sales can push the price down.
Volume, liquidity and slippage
- Trading volume: how much was traded in a period, usually 24 hours. Some reported volume, especially on small exchanges, has been inflated by fake trading in the past, so treat it with care.
- Liquidity: how easily you can buy or sell without moving the price much. Big coins on big exchanges are liquid; small tokens often aren't.
- Slippage: the gap between the price you expected and the price you got. It grows with bigger orders and thinner markets.
A token can show a huge market cap while only a little money is actually available to buy it back. If holders all try to sell, the price can collapse long before they get "market cap" value.
Bitcoin dominance
Bitcoin dominance is Bitcoin's share of the total market cap of all crypto. It has been above half since 2024, but fell to around 40% in 2021–2022.
Frequently asked questions
What is a good market cap for a crypto?
There isn't one. Market cap is a size, not a quality score. Larger coins tend to be more liquid and less volatile, but not safer from losses.
Is market cap the money invested?
No. It's today's price times the supply. The real money that went in, and that could come out, is usually much less.
What does FDV mean?
Fully diluted valuation: price times the maximum supply, including coins not yet released.
Where to next
Written for beginners and checked against the sources listed. Last reviewed October 26, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.