Market Capitalization
finance · market
A sizing estimate calculated by multiplying an asset's reference price by its reported circulating supply.
- Also known as
- market cap
Market capitalization, or market cap, is usually calculated as reference price multiplied by reported circulating supply. It is useful for comparing the quoted size of assets with very different unit prices.
Market cap is not the amount of money invested, the cash available to sellers, or a price at which every unit could be sold. The reference price is set at the margin, so a thin market can imply a large capitalization without enough bids to realize it.
Results depend on exchange prices and supply methodology. Lost coins, locked allocations, bridged representations, treasury holdings, unverified burns, rebasing, and disputed circulating-supply definitions can make providers disagree.
Fully diluted valuation applies the current price to a future, maximum, or otherwise broader supply assumption. Neither metric measures security, decentralization, utility, revenue, distribution fairness, or liquidity, so comparisons should pair the formula with those separate facts.
Related terms
Circulating Supply
→The estimated number of coins or tokens currently available to the market, excluding locked or unissued supply.
blockchain · cryptocurrency
Maximum Supply
→The upper bound on asset issuance under a cryptocurrency's current protocol rules.
economics · tokenomics
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
finance · trading
Volume
→The amount of an asset traded over a period, measured in units of the asset, quote currency, or notional value.
trading · metrics