Crypto Market Capitalization — FAQs
1) What is crypto market capitalization?
Market capitalisation is the total value of a crypto asset or the entire crypto market.
For a single coin, it’s the circulating supply multiplied by the current price. For the total market,
it’s the sum of market caps across tracked assets.
For a single coin, it’s the circulating supply multiplied by the current price. For the total market,
it’s the sum of market caps across tracked assets.
2) How is a coin’s market cap calculated?
Market cap = Price × Circulating Supply.
Example: if a token trades at $2 and 150 million tokens circulate, its market cap is $300 million.
Circulating supply excludes locked or unissued tokens.
Example: if a token trades at $2 and 150 million tokens circulate, its market cap is $300 million.
Circulating supply excludes locked or unissued tokens.
3) What’s fully diluted market cap vs circulating market cap?
Circulating market cap uses only the tokens currently in circulation.
Fully diluted valuation (FDV) assumes all possible tokens are issued (max supply × price).
FDV can overstate value if large allocations unlock later.
Fully diluted valuation (FDV) assumes all possible tokens are issued (max supply × price).
FDV can overstate value if large allocations unlock later.
4) Does a higher market cap mean a safer investment?
Not necessarily. Higher caps often imply greater liquidity and lower short-term volatility,
but they do not remove risks such as contract bugs, governance issues, or macro shocks.
but they do not remove risks such as contract bugs, governance issues, or macro shocks.
5) Why does total crypto market cap change so quickly?
Crypto trades 24/7 and reacts instantly to liquidity, leverage, and global news.
Rapid price swings in major coins (BTC, ETH) ripple through the total market cap in real time.
Rapid price swings in major coins (BTC, ETH) ripple through the total market cap in real time.
