Circulating market capitalization measures a token’s current price multiplied by the number of tokens considered publicly circulating. Fully Diluted Valuation (FDV) applies the current token price to a broader supply figure, usually the maximum supply or fully diluted supply. Both estimate token valuation, but they reflect different stages of supply.

The main difference is how much future token supply is included. Circulating market cap reflects tokens currently available in the market, while FDV estimates the implied valuation if the selected future supply were valued at today’s price. Market cap is useful for comparing current network size, while FDV helps reveal potential dilution from future unlocks and issuance. However, FDV can overstate future economic value when large unlocks are years away or the final token supply is uncertain.

What Is Circulating Market Capitalization?

Circulating market capitalization measures a token’s current price multiplied by its circulating supply. Circulating supply generally includes tokens available to the public while excluding locked, reserved, or unreleased allocations.

The exact supply can vary between data providers because treasury holdings, staking contracts, bridges, and market-maker allocations may be classified differently. Circulating market cap therefore reflects both the token’s market price and how its available supply is defined.

What Is Fully Diluted Valuation (FDV)?

Fully Diluted Valuation (FDV) estimates a token’s valuation using its current price and the broader supply expected to exist, usually maximum supply or fully diluted supply. It helps show how large a project’s implied valuation could be if currently locked or unreleased tokens entered circulation at the same price.

FDV requires more context when token supply can change through inflation, governance, burns, or other issuance rules. A large gap between FDV and circulating market cap can signal significant future dilution, but the timing and size of token unlocks determine how quickly that additional supply may actually reach the market.

Circulating Market Cap vs. FDV: What Are the Key Differences?

The same spot price drives both calculations. The gap comes from the supply denominator, so bad supply classifications can make either number misleading.

DimensionCirculating Market CapitalizationFully Diluted Valuation (FDV)
FormulaCurrent token price multiplied by reported circulating supplyCurrent token price multiplied by maximum or diluted supply
Time focusMeasures valuation across supply currently counted as circulatingProjects today's marginal price across a broader future supply
Unlock sensitivityChanges when locked tokens enter the circulating classificationAlready includes counted future tokens before they become tradable
Data judgmentRequires classifying treasury, foundation, bridge, and locked balancesRequires a credible maximum supply or dilution assumption
Liquidity meaningDoes not mean circulating units can sell at current priceDoes not mean future units can sell at current price
Best useCompares current network scale and market rankingHighlights dilution gap and implied valuation before unlocks

How Do Circulating Market Cap and FDV Work?

A simple example shows how the two metrics differ.

1. Start with the token price: Assume a token trades at $2.
2. Calculate circulating market cap: With 100 million circulating tokens, the market cap is $200 million.
3. Calculate FDV: With a maximum supply of 1 billion tokens, the FDV is $2 billion.
4. Measure the gap: The 10x difference shows that most of the potential supply is not yet circulating. It does not mean $1.8 billion of selling will occur, since future tokens may unlock gradually and the market price can change.

Unlock schedules determine when additional tokens become available, while vesting, staking, treasury policy, burns, and holder behavior determine how much supply actually reaches the market.

What Does the Market-Cap-to-FDV Ratio Mean?

The market-cap-to-FDV ratio compares a token’s circulating market capitalization with its fully diluted valuation. It shows how much of the token’s potential supply is already reflected in the circulating market.

For example, if a token has a $200 million market cap and a $1 billion FDV, its market-cap-to-FDV ratio is 20%. This roughly means only one-fifth of the fully diluted supply is currently represented in circulating market value.

• Higher ratio: More of the potential supply is already circulating, so future dilution may be relatively limited.
• Lower ratio: A larger share of supply remains locked or unreleased, which can create greater future dilution risk.

The ratio should be read together with the token unlock schedule, issuance rate, recipient allocations, and liquidity. A low ratio does not automatically mean the token is overvalued, especially when future unlocks are gradual or demand grows alongside supply.

What Risks or Trade-Offs Do Market Cap and FDV Create?

• Circulating market cap: Can make a low-float token appear smaller even when substantial team, investor, or treasury allocations remain locked. A small float can also make the current valuation more sensitive to limited trading.
• FDV: Can overstate near-term dilution by valuing tokens that may remain locked for years at today’s price. It can also understate dilution when future inflation or governance-approved issuance is not included.
• Both metrics: Ignore factors such as liquidity depth, treasury assets, protocol revenue, token-holder rights, and whether future supply rules may change.

Related Concepts

1. What Is Market Capitalization?
2. What Is Maximum Supply?
3. What Is Circulating Supply?
4. What Is Tokenomics?

Further Reading

1. What is Crypto Market Cap and How to Analyze It?
2. What Is Bitcoin Dominance (BTC.D) and How to Use It for Smarter Crypto Trading?
3. What Is Altcoin Season (Altseason) and When Does it Start in 2026?
4. What Is Crypto Fear and Greed Index and How to Use It in Crypto Trading?