Fully Diluted Valuation vs Circulating Market Cap

Circulating market cap multiplies a token's price by the number of coins actually in public circulation right now. Fully diluted valuation (FDV) instead multiplies price by the maximum total supply the token will ever have, including coins still locked up for the team, investors, or future emissions. Both numbers use the same price, so the only difference is which supply figure you plug in.

The gap between them matters because a token with a small circulating supply and a huge locked supply can look cheap on market cap while its FDV reveals a much larger implied valuation once all those coins eventually unlock and hit the market — often diluting the price of the tokens already trading.

Worked example. A token trades at $2 with 50 million coins circulating and a maximum supply of 1 billion. Circulating market cap is $100 million, but FDV is $2 billion — a 20x gap that signals roughly 95% of the eventual supply hasn't been released yet, a warning sign for future sell pressure.

New listings are especially prone to this trap: a team can launch with a tiny fraction of total supply circulating, producing a modest, appealing market cap, while insiders and early investors hold the rest under a vesting schedule that unlocks steadily over following years. As those unlocks arrive, the extra supply hitting exchanges can weigh on price even if nothing about the project's fundamentals has changed, which is why comparing FDV alongside market cap, not market cap alone, is standard practice before evaluating a new token.