Market cap, short for market capitalization, estimates the market value of a cryptocurrency’s circulating units. It multiplies the current price per unit by circulating supply and is commonly used to compare the relative size of cryptoassets.
Calculate with consistent inputs
If a hypothetical token trades at USD 3 and has 20 million tokens circulating, its market cap is USD 60 million. A change in either price or circulating supply changes the result. The price and supply figures should refer to the same asset and a consistent measurement time.
Circulating supply is not necessarily the number of tokens already created. Locked allocations and other restricted holdings may be excluded, depending on the data provider’s methodology. Different supply estimates or price sources can produce different reported market caps.
What the number does not measure
Market cap is not the amount of money invested in a project, its cash reserves or the proceeds everyone could obtain by selling. A small trade can change the reference price used to value all circulating tokens, while large sales can move prices substantially.
A low unit price does not by itself make a token inexpensive relative to another. Market cap adds supply context, but it still does not establish liquidity, project quality or fair value.