Market capitalization: total value of a coin's supply

A Simple but Loaded Metric

Market capitalization—usually shortened to market cap—is the price of one token multiplied by the number of tokens currently in circulation. It is the most common way to compare cryptocurrencies, and it determines the order of leaderboards on every data site. A coin trading at $1 with a billion units circulating has the same market cap as a coin trading at $1,000 with a million units circulating: $1 billion.

The metric matters because price alone is misleading. A $0.001 memecoin with a trillion tokens in circulation has a much larger total valuation than a $500 coin with only 100,000 tokens. Market cap normalizes for supply differences and gives a rough sense of how much capital is committed to a project relative to its peers.

Two important caveats. First, circulating supply excludes locked, vested, or unmined tokens, so the figure can understate dilution. Fully diluted valuation, which assumes the maximum supply is in circulation, often paints a very different picture. Second, market cap is not the same as money invested—a thin order book can sustain a high price with very little capital actually entering the asset, which is why low-liquidity tokens can show inflated caps that collapse the moment anyone tries to exit.