Market cap, explained
The short answer
Market cap is price times circulating supply. It's the standard way to compare the size of cryptocurrencies, but it doesn't mean that much money could actually be cashed out.
The formula
Market capMarket capitalization Price multiplied by circulating supply: a rough measure of a cryptocurrency's total size. = price × circulating supplyCirculating supply The number of coins currently available and moving in the market.
A coin priced at $1 with 1 billion coins circulating has a $1 billion market cap. A coin priced at $100 with 1 million coins has a $100 million market cap, even though its price looks higher.
Why price alone is misleading
Beginners often see a cheap-looking coin and think it has more room to grow. But a $0.01 token with 500 trillion units in circulation is already enormous. Compare market caps, not prices.
What market cap doesn’t tell you
- It isn’t cash. If everyone tried to sell at once, the price would fall long before the full market cap was realised.
- Supply can change. New tokens might be released later. See fully diluted valuationFully diluted valuation What a project's market cap would be if every token that will ever exist were already in circulation..
- It says nothing about quality. Large caps can still collapse, and small ones can be legitimate.
Total market cap and dominance
Add every coin’s market cap together and you get the total crypto market cap. It’s the number you’ll see in our market snapshot. Bitcoin dominanceBitcoin dominance Bitcoin's share of the total crypto market cap. is bitcoin’s share of that total. A rising dominance often means money is moving toward bitcoin and away from smaller coins.
Last reviewed Oct 3, 2026. Educational content only, not financial advice.