Understanding market cap
A coin's market capitalisation, or market cap, is its price multiplied by the number of coins in circulation. If a coin trades at $2 and 500 million coins are circulating, its market cap is $1 billion. Coins are usually ranked by it: rank #1 is the coin with the largest market cap.
Three kinds of supply
- Circulating supply: the coins that exist and can be traded today. Market cap uses this one.
- Total supply: every coin created so far, including coins locked by the project or its team.
- Max supply: the most that can ever exist, if the coin has a limit. Bitcoin's is 21 million; many coins have none.
Fully diluted value uses the max supply instead (or the total, when there's no max). A big gap between market cap and fully diluted value means many coins are still to be released, and each new coin released is more supply for the same demand.
What it can't tell you
- It isn't the money invested. A $1 billion market cap doesn't mean anyone paid $1 billion, or that $1 billion could be taken out.
- It rests on the last trade. For a coin that trades thinly, a few trades can move its price, and so its market cap, a long way.
- Supply figures come from the projects and data providers, and can be wrong or out of date.
- A large market cap isn't a sign of a good investment, and a small one isn't a bargain.
On CheckACoin
Market cap, rank and supply come from CoinMarketCap, read once a day. Each coin's page shows its circulating, total and max supply next to its price, so you can see how much is still to come. Explore the market
Every coin page shows its usual range, typical moves, market cap and supply, rebuilt daily.
Explore the market