Crypto Market Cap Explained — and Why Unit Price Is Meaningless

Market capitalization = current price × circulating supply. It is the only honest way to compare the size of two networks. Comparing unit prices — "this coin is cheap, it is only $0.10" — tells you nothing, because supply differs by many orders of magnitude.

A concrete example

Coin A trades at $0.10 with 100 billion coins: market cap $10 billion. Coin B trades at $100 with 10 million coins: market cap $1 billion. Coin A is the bigger, not cheaper, network. For A to 10× from here it must add $90 billion of value; B needs only $9 billion.

Circulating, total and max supply

• Circulating: coins publicly tradable now (used for market cap).
• Total: issued so far, including locked/vested coins.
• Max: hard cap, if one exists (BTC: 21M; ETH: none).
• FDV (fully diluted valuation): price × max/total supply — what the cap would be if everything were unlocked.

Why FDV matters for new tokens

Many launches list with 5–10% of supply circulating. A "$500M market cap" token can carry a $10B FDV — meaning heavy unlocks are scheduled to hit the market. Check the unlock schedule before assuming a low cap means upside.

Bitcoin dominance

BTC dominance = Bitcoin market cap ÷ total crypto market cap. Rising dominance usually means money hiding in the safest crypto asset; falling dominance ("altseason") means risk appetite expanding. Treat it as a sentiment dial, not a trading signal by itself.