Market Cap

For example, if a cryptocurrency has 10 million tokens circulating and each is worth $5, its market capitalization would be $50 million. This metric gives a more accurate reading of the size of a cryptocurrency than price alone, as it reflects the total value of all tokens available for trading on the open market.

Cryptocurrencies are often grouped into four categories: large-cap, mid-cap, small-cap and micro-cap. While there are no strict market cap thresholds determining these classifications, token trackers such as CoinGecko and CoinMarketCap provide some general rules of thumb. Large-cap cryptocurrencies like bitcoin and Ethereum have valuations in the tens of billions or more; micro-cap cryptocurrencies typically have market caps of under $50 million.

Another metric related to market cap is fully diluted valuation (FDV). This metric uses the maximum supply of the token, where one exists, rather than circulating supply. FDV therefore accounts for any additional tokens locked in vesting, project treasury accounts and elsewhere. The gap between market cap and FDV can therefore give an indication of the potential for future dilution as tokens are unlocked for early-stage investors, team members, or treasury operations.