Two numbers sit next to each other on every token page, and most people read only one of them. Market cap tells you what a project is worth today. Fully diluted valuation tells you what it would be worth if every token that will ever exist were already trading. When those two numbers are close together, the token’s supply story is finished. When they are far apart, somebody is holding tokens that are not on the market yet, and one day they will be. This page explains how to read that gap, because it is one of the few pieces of analysis that takes five minutes and repeatedly saves people from expensive surprises.
The definitions, in plain language
Market capitalization is the price of one token multiplied by the number of tokens currently in circulation. It answers: what is the market paying for this project right now?
Fully diluted valuation , almost always shortened to FDV, is the price of one token multiplied by the total or maximum supply that will ever exist. It answers a hypothetical: what would this project be worth if every token, including those still locked, vesting, unmined or unissued, were trading at today’s price?
The word doing the heavy lifting is “hypothetical.” FDV is not a prediction and not a valuation in any traditional sense. It is a thought experiment, and its value lies entirely in the comparison with market cap.
Why the gap exists at all
Crypto projects almost never release all their tokens at once. Allocations to founders, employees, early investors, treasuries and ecosystem funds are locked and released gradually over years, a structure borrowed from startup equity and designed to keep everyone committed. Proof of work coins have a version of the same thing: Bitcoin’s 21 million cap includes coins that have not been mined yet.
So the gap between market cap and FDV is a measure of one thing: how much of the supply story is still ahead of you rather than behind you.
A worked example makes it concrete. Take a token at one dollar, with 100 million circulating and one billion total supply. Market cap is $100 million. FDV is $1 billion. Ten times the tokens are still to come. For the price to hold at one dollar as that supply arrives, demand must grow tenfold, just to stand still.
Reading the ratio
Divide FDV by market cap and you get a single number that tells you where a token sits on its supply timeline.
Close to 1. Almost everything is circulating. The supply story is essentially over, and future price movement depends on demand rather than on absorbing new tokens. Established coins with completed distribution live here.
Around 1.5 to 2. Meaningful supply is still to come, but the situation is manageable and usually well telegraphed. Most maturing projects sit in this band.
Above 3. The majority of the eventual supply is not yet trading. Every rally will be met by holders whose tokens are unlocking, and the chart usually shows it: advances that keep getting capped at progressively similar levels.
Two real cases from this site’s own coverage illustrate both ends. XRP has been recorded with an FDV around $112.9 billion against a market cap near $70.3 billion, a difference of roughly $42.6 billion representing tokens held largely in scheduled escrow. Sui has shown an FDV near $6.7 billion against a market cap near $2.7 billion, a ratio around 2.5, and analysts covering the chain have repeatedly cited its unlock schedule as the reason rallies keep stalling.
The four mistakes people make with FDV
Treating FDV as a price target. It is not one. FDV assumes every future token trades at today’s price, which is precisely what does not happen when supply expands. If anything, a high FDV argues for a lower future price, not a higher one.
Ignoring the timeline. A token with three times its circulating supply still to come, spread evenly over ten years, is a completely different asset from one with the same ratio releasing in a single cliff next quarter. The shape matters as much as the size, which is why the token unlock guide sits alongside this page: cliff releases and linear drips behave nothing alike.
Ignoring who receives the tokens. Supply arriving in a DAO treasury has no seller attached. Supply vesting to early investors does. Same number, very different consequences, and the difference is usually documented in the project’s own vesting schedule.
Comparing FDV across categories. A high FDV ratio is normal and unremarkable in a young project and alarming in a mature one. Compare tokens to their own peers and their own history, not to the whole market.
The check that catches things nobody else notices
Here is a practical technique this site uses, and it has already flagged one collapse in advance.
Watch market cap and price over the same window and compare their percentage changes. If price rises 47% while market cap triples, the extra growth did not come from price. It came from circulating supply increasing, meaning new tokens entered the float. That is either a data provider revising its supply figure, or real new supply arriving in the market, and the two possibilities point in opposite directions for a holder.
We ran exactly that calculation on a mid-cap token in July 2026, flagged the unresolved supply question as the most important thing to verify about it, and watched the token fall roughly 90% from its peak over the following ten days. The arithmetic did not predict the timing. It identified the fragility, which is all any honest analysis can do.
Anyone can run this check. Supply figures are published on CoinGecko and verifiable directly against the token contract on a block explorer such as Etherscan , and unlock calendars are aggregated on DefiLlama with project documentation as the authoritative source.
Bottom Line
FDV is not a valuation, it is a warning label. It tells you how much of the supply is still coming, and the ratio against market cap tells you whether the project’s dilution is behind it or ahead of it. Read the gap, then read the schedule behind the gap: when the tokens arrive, over what period, and to whom. Those three questions take ten minutes and explain a large share of the charts that seem to rise and then inexplicably stall at the same place, over and over, for years.
This article is for information only and is not investment advice. Crypto assets are extremely volatile and you can lose your entire stake. Always do your own research.
