Imagine buying a slice of pizza for $5. Great deal.
Then you find out the restaurant has promised another nine slices of the same pizza to other people, to be handed out over the next few years. Your slice just got a lot smaller. You just didn't notice yet.
That, in one sentence, is the difference between market cap and fully diluted value. And it's one of the most useful 30-second checks in crypto.
The short version
- Market cap = price × the coins that exist and can be traded today (the circulating supply).
- Fully diluted value (FDV) = price × all the coins that will ever exist, including the ones still locked up.
- When the two are far apart, a lot of new supply may hit the market later. More supply chasing the same demand tends to push the price down.
- The quick check: divide market cap by FDV. Close to 1 means most coins are already out. Under 0.5 means more than half are still to come.
Market cap: what the coin is "worth" today
Market cap is price multiplied by circulating supply. CoinGecko describes circulating supply as an approximation of the coins that are currently not locked and are available to trade (CoinGecko: what is market cap).
It's the number most rankings use, and it's useful. But it only counts the coins that are out today.
Fully diluted value: what it would be "worth" if every coin were out
FDV is the theoretical market cap if the entire supply were circulating at today's price (CoinGecko glossary).
Notice the word theoretical. In real life, releasing more coins usually moves the price. FDV just tells you how big the coin would look if nothing changed. That makes it a warning light, not a forecast.
Same price, very different coins
Here are two made-up coins, purely to show the maths:
| Coin A | Coin B | |
|---|---|---|
| Price | $2.00 | $2.00 |
| Circulating supply | 500 million | 500 million |
| Market cap | $1 billion | $1 billion |
| Maximum supply | 550 million | 2 billion |
| Fully diluted value | $1.1 billion | $4 billion |
| Market cap ÷ FDV | 0.91 | 0.25 |
On a rankings page, these two look identical. Same price, same market cap, same spot on the list.
But Coin B has 1.5 billion more coins still waiting to be released. That's three times what's trading today. If those coins are mostly owned by early investors and the team, who paid far less than $2, some of them will probably want to sell when they can.
Coin A has very little left to release. What you see is mostly what you get.
Is this a real problem, or just theory?
It's real, and it's common.
In a CoinGecko study of the top 300 coins (excluding stablecoins), 21.3% had a market cap less than half their FDV. CoinGecko calls these "low float". Most of them were young: 54 of those 64 had launched within the previous four years (CoinGecko research).
Bitcoin sits at the other end. Its supply is capped at 21 million coins and almost all of them are already in circulation, so its FDV and market cap are nearly the same (CoinGecko: Bitcoin).
How to check any coin in 30 seconds
- Open the coin's page on a data site such as CoinGecko.
- Find Market Cap and Fully Diluted Valuation.
- Divide the first by the second.
- Then look for an unlock schedule: when the locked coins are released, and to whom.
A low ratio isn't automatically bad. Some projects release supply slowly and sensibly, and demand can grow faster than supply. But it's a question you want answered before you buy, not after a big unlock lands.
Two traps to avoid
- "It's only $2, it's cheap." Price on its own means nothing. A $2 coin with 2 billion coins to come can be far "more expensive" than a $200 coin with a fixed supply. Always look at the size, not the sticker.
- "FDV is the real value." It isn't either. FDV assumes every future coin is worth today's price, which rarely happens. Use it to measure how much supply is coming, not to set a fair price.
What to watch
Our next explainer covers the other number that quietly decides your result: liquidity. In other words, whether you can actually sell what you bought at the price you see on the screen.
Sources
- CoinGecko glossary: fully diluted valuation
- CoinGecko: what is market cap in crypto
- CoinGecko: what is fully diluted valuation (FDV)
- CoinGecko research: 1 in 5 top crypto are low float
- CoinGecko: Bitcoin supply figures
This article is general market commentary for educational purposes. It is not investment advice or a recommendation to buy or sell any asset. Crypto assets are volatile and you can lose your entire investment.