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2. Price, market capitalisation and supply
Compare quantities with consistent bases
The price of a single token says little about a project's size. Circulating market capitalisation equals price multiplied by circulating supply. A hypothetical coin priced at $1 with 700 million circulating tokens has a $700 million market cap. Another priced at $100 with 1 million tokens has a $100 million market cap. The first is not automatically cheaper because its unit price is smaller.
Market cap is not the amount of money invested in an asset. It applies a current unit valuation to a specified supply; selling the entire supply at the last quoted price is generally impossible. A $100 million increase in market cap therefore does not prove an inflow of exactly $100 million.
Identify FDV's supply basis
Fully diluted valuation applies the current price to a wider supply measure. Check whether a particular provider uses total supply or maximum supply and how burned tokens are excluded. In a practice example, price $1, circulating supply 700 million and an FDV supply basis of 1 billion give a $700 million market cap and $1 billion FDV. The denominators differ; these are not two contradictory prices.
Distinguish circulating, total and maximum supply. Total refers to tokens already created under the chosen methodology; maximum refers to a defined upper limit, where one exists; circulating refers to available circulation under the source's rules. If no hard cap exists, do not invent a maximum issuance figure. Bridges and wrapped assets can also lead to double counting.
Calculate future circulation separately
At unchanged market capitalisation, price equals market cap divided by circulating supply. If supply increases by 25%, the same market cap is spread across 1.25 times the original token count. The resulting price is the old price divided by 1.25, rather than the old price minus 25%.
Practice: record price, market cap, circulating supply and FDV basis for three cards. Recalculate one market cap manually. If circulation has not been verified, label it accordingly: precise arithmetic cannot repair an unreliable starting value.