Fully Diluted Market Cap vs Circulating Supply: What a Token's Price Hides

A token's price on its own tells you very little. One coin can trade at $0.50 and be worth billions in total, while another trades at $500 and is a small project. To compare them, you need to know how many units exist.

That is where two numbers come in: market cap and fully diluted market cap. The first counts the coins trading today. The second counts every coin that will ever exist.

The gap between them is one of the most useful things to check before buying a newer token. Here is how each figure works, where the supply numbers come from, and what a wide gap can mean.

Circulating supply, total supply and max supply

Most price sites list three supply figures. They sound alike, but they measure different things.

Circulating supply is the number of coins that are already out in the market and can be traded. Coins held by ordinary users and on exchanges count. Coins still locked in vesting contracts, team wallets or a foundation treasury usually do not.

Total supply is every coin that has been created so far, minus any that have been destroyed. It includes the locked tokens that are not yet circulating.

Max supply is the hard ceiling: the most coins that can ever exist under the project's rules. Bitcoin's is 21 million. Some assets, such as Ether, have no fixed maximum at all, and new coins keep being issued over time.

What is circulating supply in crypto, in practice?

Circulating supply is an estimate. There is no single on-chain field labelled "circulating". Data providers such as CoinGecko and CoinMarketCap work it out from the blockchain plus the wallet lists and vesting details that projects report.

That means two sites can show different numbers for the same token. One might treat a treasury wallet as circulating, while another leaves it out. If the figures disagree, it is worth checking the project's own documentation and its published token distribution.

For Bitcoin the picture is simple. New coins enter only through mining rewards, so circulating supply sits at roughly 19.9 million today and creeps toward the 21 million cap. Newer tokens are messier, because large shares are often held back and released over several years.

How market cap is calculated

Market cap is price multiplied by circulating supply. A token at $2 with 100 million coins in circulation has a market cap of $200 million.

It is the headline number on most rankings, and it gives a quick sense of how big a project is today. Our guide to reading market cap in crypto headlines covers the common traps when news stories quote it.

What market cap does not show is what happens when more coins arrive. For a token where most of the supply is still locked, today's figure can understate the claim future holders will have.

Fully diluted market cap explained

Fully diluted market cap, often shortened to FDV for fully diluted valuation, is price multiplied by max supply. If a token has no max supply, sites usually fall back to total supply instead.

Take the same example token at $2. Suppose 100 million coins circulate, but the max supply is 1 billion. Its market cap is $200 million, while its fully diluted valuation is $2 billion.

The FDV answers a simple question: what would this project be worth at today's price if every coin already existed? It is a hypothetical, not a forecast. Prices rarely stay put while hundreds of millions of new coins reach the market.

You will see "FDV crypto" and "fully diluted market cap" used for the same idea. Some analysts separate them slightly by which supply figure they use, so check the method on whichever data site you rely on.

Why the gap matters

When market cap and FDV are close, most of the supply is already trading. Bitcoin is a good example. With nearly 95% of its coins mined, its fully diluted figure is only a little above its market cap.

When the gap is wide, a large share of coins is still to come. That supply usually belongs to early investors, the founding team, ecosystem funds or future staking rewards. As it unlocks, every existing holder owns a smaller slice of the whole.

New supply does not automatically push the price down. If demand grows faster than issuance, the price can still rise. But steady unlocks act like a headwind, because someone has to buy every new coin that holders decide to sell.

A token with a small float and a very high FDV can also look cheap at a glance. Its market cap seems modest, yet buyers are effectively paying a price that values the whole project at many times that. Binance Research flagged this pattern in a May 2024 report on low-float, high-FDV launches. It found that tokens launched that year had a combined market cap of only about 12.3% of their fully diluted valuation.

Reading token unlock schedules

The timing of new supply matters as much as the amount. Most projects publish a vesting schedule in their documentation or tokenomics page.

A common setup includes a cliff, a period of a year or so where insider tokens stay fully locked. After the cliff, tokens often release in monthly or quarterly batches. Large single unlocks tend to get attention because so many coins become sellable at once.

Unlock tracking sites gather these schedules in one place, but the project's own documents are the primary source. Look at who receives each batch. Coins released to a community rewards programme behave differently from coins released to early venture investors with a low entry price.

For a broader view of how supply rules, allocation and incentives fit together, see our explainer on tokenomics.

When fully diluted valuation can mislead

FDV is useful, but it has blind spots. It assumes every future coin is worth today's price, which is rarely true.

It also ignores coins that will be removed. Some projects buy back and destroy tokens, which shrinks total supply over time. If that is part of a token's design, our guide to coin burns explains how it works and why it is not always as bullish as it sounds.

For assets with no hard cap, the fully diluted number depends on which supply figure a site picks. Ether's total supply changes with issuance and fee burning, so its FDV is closer to a moving snapshot than a fixed ceiling.

Finally, supply data is only as good as what projects disclose. Missing wallets or vague vesting terms make every figure less reliable, so treat a token that hides its distribution with extra caution.

A quick checklist before you buy

Before buying a newer token, it helps to look at a few numbers side by side.

Start by comparing market cap with fully diluted valuation. If the two are close, little supply is left to come. If FDV is five or ten times higher, most coins have not reached the market yet.

Check the unlock calendar for the next twelve months, and note who receives those coins. Then read how circulating supply is defined on the data site you use, and whether the project's own figures match.

None of these numbers decides whether a token is a good buy. Together, though, they show how much of the story is already priced in, and how much new supply your coins will have to compete with.