Same Same, but Different #16— Market Cap vs Fully Diluted Valuation

When looking at a crypto project’s valuation, two numbers often show up: Market Cap and FDV (Fully Diluted Valuation). They both tell you how much a project could be worth, but they do so from very different angles.

One shows the current value of what’s already out there. The other shows the projected value if every single token eventually hits the market.

Let’s break it down.

Same Same: Both Are Valuation Metrics

For any investors looking at a project, the Market Cap and FDV are both ways to measure how much a token's project is worth, in theory. They’re calculated by using the token’s price but the difference is in what kind of supply they’re multiplying it by.

They both:

• Use the same token price
• Help investors gauge how “big” a project is
• Are useful for comparing across coins and tokens

However, they answer very different questions.

Different: Circulating Supply vs. Max Supply

Market Cap = the current value of the project

The project's market cap is based on the number of its tokens that are currently in circulation.

Formula:

Market Cap = Token Price × Circulating Supply

• Reflects the present market value
• Accounts only for tokens available to trade right now
• Used for comparing how “established” or liquid a token is today

Example:

If a token trades at $2 and there are 10 million tokens in circulation, then its Market Cap is $20 million. Even if there are 100 million tokens in total, only the circulating ones are counted here.

FDV = the potential value it could reach in the future

Fully Diluted Valuation assumes that all tokens—even those currently locked, vested, or unminted—are in circulation.

Formula:

FDV = Token Price × Max (or Total) Supply

• Shows how big the project could get if all tokens enter circulation
• Highlights potential dilution risks from future token unlocks
• Useful when evaluating tokenomics in early-stage or pre-launch projects

Example:

Using the same token at $2, but this time with a max supply of 100 million tokens. This also means its FDV is now $200 million. However, there are another 90 million tokens that could still be released in the future, which could possibly dilute the price for existing holders. 

Quick Comparison Table

Why This Matters

Let’s say you’re comparing two tokens that you want to include in your portfolio for long-term speculation. You would need to find out if there are potential token unlocks ahead that might dilute the price over time.

Token A: Market Cap = $50M | FDV = $60M → Minimal dilution risk

Token B: Market Cap = $50M | FDV = $500M → Potential for big unlocks ahead

If you’re investing, this helps answer:

• Am I buying into current demand or inflated future supply?
• How much can this token grow over a period of time without massive dilution?
• Are the tokenomics sustainable?

The Market Cap tells you where the project currently stands. However, the FDV shows you how big it could possibly get in the future, but only if the price stays stable while more tokens are released. Same numbers, but different context.

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