Market Cap

Market cap (market capitalization) is the total value of a cryptocurrency, calculated by multiplying its current price by its circulating supply. It is the standard measure for comparing the size of different crypto assets and the basis for rankings on sites like CoinGecko or CoinMarketCap: Bitcoin has ranked first for essentially all of crypto's history, with Ethereum typically second.

Market cap matters because price alone tells you nothing about size. For example, a token priced at $0.01 with 100 billion tokens in circulation has a market cap of $1 billion — larger than a token priced at $500 with only 1 million units, whose market cap is $500 million. Traders also group assets by size: large-cap coins tend to be more established and liquid, while small-cap coins are riskier but can move more dramatically.

A common misconception is that market cap represents the money invested in an asset or the cash you could extract from it; it is simply the last traded price applied to every unit, and selling any large amount would push the price down well before you realized that total. Related measures refine the picture: fully diluted valuation (FDV) uses the maximum future supply instead of the circulating supply, which is useful for spotting tokens whose cap looks modest only because most of the supply has not been released yet.