Économie
Market capitalisation, FDV and dominance: reading market figures
A token's unit price does not establish its size. Circulating supply, market capitalisation, diluted valuation and dominance provide complementary reference points.
Olivia ParkerEditorial pen name
Price and circulating supply
A token priced at a few cents is not automatically cheaper than one worth thousands of euros. The number of units also matters. Market capitalisation multiplies the selected price by circulating supply: the units considered publicly available. The result describes a valuation convention, rather than a reserve of money deposited in the project or an assessment of its technical quality.
02How it works+
Imagine a fictional token priced at two euros with ten million units circulating. Its market capitalisation is twenty million euros. That calculation applies a marginal price to all counted units. It does not establish that every unit could be sold at that price. A small trade at a different level can therefore change the theoretical valuation without an equivalent amount of money entering or leaving the market.
Total supply generally refers to existing units after the burns recognised by the data provider. Maximum supply is a possible limit defined by the protocol; some assets have no such limit. Locked units or holdings attributed to particular parties may be excluded from circulating supply. Estimates can also be revised. Understanding the quantity used is consequently part of understanding the valuation itself.
03Key points to remember+
Different supply assumptions
FDV, or fully diluted valuation, applies the current price to a broader supply. Depending on the provider's convention, this may use total or maximum supply. It is an accounting projection, without assuming that the price will remain unchanged as more tokens become available. A substantial gap from circulating capitalisation therefore raises questions about future issuance and the assumptions behind the calculation.
Consider an asset with only part of its eventual supply currently available for trading. Circulating and diluted valuations use different quantities. Their difference provides information about the calculation, but does not predict the price at which future units could be sold. Emission schedules, restrictions and supply estimation methods remain necessary context. Apparent numerical precision does not eliminate the assumptions underlying the indicator.
Bitcoin dominance compares its capitalisation with that of the cryptoasset universe being tracked. Changing that universe can change the result. Dominance can rise when bitcoin increases, when other assets fall more sharply or when several movements occur together. The figure therefore does not, on its own, describe net purchases or the distribution of every user's portfolio across different assets.
What dominance actually measures
Different dashboards can report different dominance figures without covering exactly the same universe. Update times, display currencies and included categories matter. A coherent comparison retains those boundaries and uses equivalent methods. The denominator deserves as much attention as the asset being observed, because changes elsewhere in the group can affect the percentage even when the asset's own valuation remains unchanged.
Market capitalisation, FDV and dominance answer related but different questions. None directly measures a project's future value, the amount every holder could realise in a sale or the total cash contributed by buyers. Together they help describe supply assumptions and valuation distribution. Their usefulness comes from a clear definition, a consistent date and an explicit scope, rather than treating any single ranking as a complete account of the market.