The most expensive habit in crypto is looking at the price of one coin and thinking "cheap." A $100 token can have a smaller valuation than a token priced at 1 cent. Price per unit tells you nearly nothing on its own.
This is the Daily Crypto IQ episode on why market cap misleads, and what to look at instead.
Market cap: price times circulating supply
The formula is simple:
Market cap = current price × circulating supply
The stream's example: a token at $2 with 50 million tokens circulating has a $100 million market cap. CoinGecko uses this definition too, and it also warns that market cap isn't a measure of quality or of how much money was invested.
That warning matters because of how market cap moves. Say 100 million tokens are circulating at $1, so the market cap is $100 million. A trade pushes the price to $1.10. Market cap is now $110 million, up $10 million. Nobody put $10 million in. The latest price was just applied, on paper, to all 100 million tokens, even though only a few traded at $1.10.
In thin markets, a small purchase can move the price, and that new price gets multiplied across the whole supply.
Three supply numbers, three different things
- Circulating supply: tokens currently counted as publicly available.
- Total supply: tokens already created, minus tokens permanently burned.
- Max supply: the most tokens that can ever exist. Some tokens have no max and can keep inflating.
Circulating supply changes through unlocks, staking rewards, mining and burns. Rewards and unlocks add supply. Burns remove it. Data providers can also calculate circulating supply differently, especially for treasury, staking and locked contract balances, so don't be surprised when two sites disagree.
FDV: today's price, every token
Fully diluted valuation (FDV) = current price × max (or total) supply
Back to the example: $2 per token, 50 million circulating, 500 million total. Market cap is $100 million. FDV is $1 billion.
FDV doesn't predict a future market cap. It assumes three things at once:
- Every token enters circulation.
- The price stays the same.
- Demand grows enough to hold that price.
That's a lot of assumptions. What FDV really tells you is how much future growth today's price already assumes.
The percentage that matters
Circulating percentage = circulating supply ÷ total supply
In the example, 50M ÷ 500M is 10% circulating, so about 90% of supply isn't out yet. If market cap stays flat while that supply arrives, your share of the value gets diluted and the price falls. For the price to hold, new demand has to absorb the new supply.
Generally you want circulating supply close to max supply, and max supply not huge. A small float with a big FDV means a lot of tokens are still coming.
Low float, high FDV
A typical low-float/high-FDV launch has:
- A small initial circulating supply
- A high token price, supported by limited availability
- A much larger locked supply
- That same high valuation applied, on paper, to all the future tokens
The scarcity is real at first. It isn't permanent.
Compare unlocks by percentage, not dollars
A headline like "$19 million unlock" sounds bigger than "$10 million unlock." The stream showed why that's backwards. In August 2026 data, one token's roughly $19.2M release was about 8% of its circulating supply, while another token's roughly $10M release was about 16%. The "smaller" unlock was twice the dilution.
So ask: how big is the release compared to the supply and liquidity already out there?
An unlock also isn't automatically a sell-off. It means restricted supply becomes transferable. What happens next depends on who gets it (founders, employees, early investors, a treasury, community programs), their cost basis, liquidity, demand, and whether they're required to keep holding. See how token unlocks affect price.
Market cap is not liquidity
Liquidity is how much you can buy or sell before the price moves significantly. A token can show a $1 billion market cap with only a few million dollars of usable liquidity. So there are two numbers:
- Paper valuation: latest price × circulating supply
- Executable value: what holders could actually get if they tried to sell
They are never the same.
Effective float
The stream's illustration: 100 million tokens are reported as circulating. The founder holds 40 million, 25 million are staked or locked, 20 million sit in long-term wallets, and only 15 million regularly reach exchanges and liquidity pools.
The reported circulating supply is 100 million. The effective tradable float is closer to 15 million. A smaller float moves harder in both directions.
The checklist: never rely on one number
Compare all of these together:
- Token price and circulating supply
- Total and max supply
- Market cap and FDV
- Percentage circulating
- Unlock schedule and who receives it
- Trading volume
- Actual liquidity and market depth
- Token demand
- Emission and burn rates
Our FDV dilution calculator and unlock impact calculator do the arithmetic. The judgment is still yours.
FAQ
What's the difference between market cap and FDV?
Market cap multiplies the price by the circulating supply. FDV multiplies the same price by the maximum (or total) supply, as if every token were already out.
Is a low-priced token cheap?
Not necessarily. Unit price means nothing without supply. A 1-cent token with a huge supply can be valued higher than a $100 token with a small one.
Does a token unlock mean the price will drop?
Not automatically. An unlock makes supply transferable, not sold. The impact depends on how big it is relative to circulating supply, who receives it, their cost basis, and available liquidity.
Why do sites show different circulating supplies?
Data providers treat treasury, staking and locked contract balances differently, so the same token can show different numbers.
Educational content from an Underground Crypto Daily Crypto IQ livestream. Examples are illustrative unless dated. Not financial advice.