Market Cap vs FDV in Crypto
When you look at a token, you will often see two numbers: market cap and FDV (fully diluted valuation). They can be very different. Understanding market cap vs FDV helps you see how big a project really is today and how much future token unlocks might matter.
What Is Market Cap?
Market cap (market capitalization) is the value of the circulating supply at the current price.
Simple formula: Market cap = current price × circulating supply
Circulating supply means the tokens that are currently in the market and able to trade.
Example:
Price = 2 dollars
Circulating supply = 10 million tokens
Market cap = 2 × 10,000,000 = 20,000,000 dollars.
Market cap tells you how large the token is right now, based on what is actually trading.
What Is FDV (Fully Diluted Valuation)?
FDV is the value of the maximum total supply at the current price.
Simple formula: FDV = current price × maximum total supply
Maximum supply includes:
Tokens already circulating.
Tokens locked for the team, investors, or treasury.
Tokens that will be released later through rewards or emissions.
FDV answers the question: “If every possible token already existed and traded at today’s price, what would the project be worth?”
It is a future-looking, hypothetical number.
Why the Gap Between Market Cap and FDV Matters
If FDV is much larger than market cap, it usually means a lot of tokens are still locked or not yet in circulation.
Those tokens can come into the market through:
Team and investor unlocks (vesting).
Incentive programs and airdrops.
Liquidity mining or staking rewards.
When new tokens unlock:
Existing holders can face dilution (their share of the total supply shrinks).
More tokens may be sold, adding selling pressure.
A low current market cap with a huge FDV can be a warning sign that a lot of supply is still waiting to hit the market.
How to Use Market Cap and FDV Together
Market cap alone can make a token look “small” or “early.” FDV alone can make it look huge.
Better questions include:
How much of the total supply is already circulating?
Who holds the locked tokens (team, investors, treasury)?
What is the unlock or vesting schedule?
Is token demand growing enough to absorb future supply?
These details help you judge whether growth is realistic or if you might be buying before large unlocks.
Takeaway
Market cap shows the current value of what is actually trading today. FDV shows what the project would be worth if all tokens existed at today’s price. The gap between them points to how much future supply is still coming. Use both numbers together, and always check unlock schedules and distribution instead of relying on a single headline metric.
Not financial advice. Educational purposes only.
