Market Capitalization

Market capitalization is the product of an asset’s price and its circulating supply, used as a quick proxy for relative size and to rank cryptocurrencies. It comes in variants: circulating-supply cap (coins available now), fully diluted valuation or FDV (price times maximum eventual supply), and realized cap (on-chain valuation by the price each coin last moved at). A high market cap does not imply deep liquidity or that the figure is realizable, because the last traded price is applied to every coin regardless of how thin the order book is. FDV in particular can be wildly larger than circulating cap when many tokens are still locked and scheduled to unlock later.

In plain English — Market capitalization ("market cap") estimates how much an entire crypto asset is "worth" by multiplying its current price by the number of coins in circulation. It is the standard way to rank coins and compare their relative size. Importantly, market cap is not the money invested in the asset, and a large cap does not mean you could sell a big position at that price — thin liquidity can make the number misleading.

A token trades at $2 with 500 million coins circulating, giving a market cap of $1 billion. Doubling the price to $4 would not require $1 billion of new buying — a relatively small amount of buying against thin supply can move the price (and the cap) sharply.