One of the most common mistakes new investors make is judging a coin by its price alone. A token that costs a few cents is not “cheaper” than Bitcoin in any meaningful sense. The figure that lets you compare projects fairly is market capitalisation.
How market cap is calculated
Market capitalisation is the price of one unit multiplied by the number of units in circulation:
| Term | Meaning |
|---|---|
| Price | The current value of a single coin or token |
| Circulating supply | The number of coins available to the market right now |
| Market cap | Price multiplied by circulating supply |
Because supply varies enormously between projects, two coins with the same price can have wildly different market caps. That is why analysts rank the market by capitalisation, not by sticker price. You can see the ranking update live on live crypto prices.
Circulating vs total vs fully diluted
Three supply figures are worth knowing. Circulating supply is what exists today. Total supply includes coins that are locked or reserved but already created. Fully diluted valuation imagines every possible coin already in circulation — useful for spotting future dilution in many altcoins.
What dominance tells you
Bitcoin dominance is Bitcoin’s share of the entire crypto market cap. Rising dominance often signals caution, with money concentrating in the largest asset; falling dominance can mean appetite for smaller, riskier coins. It is one input into market sentiment, not a verdict on its own.
The limits of the metric
Market cap is a useful yardstick, not a measure of how much money is “in” a coin. A small amount of trading can move a thinly traded token’s price — and therefore its market cap — sharply, which is why liquidity matters just as much. Always read capitalisation alongside volume and the other figures covered in reading a market page.
Put it into practice
Compare assets with the crypto converter, track returns with the ROI calculator, and build your vocabulary in the glossary. To understand why these numbers move, read risk and volatility.