The total value of a cryptocurrency's circulating supply: current price × circulating supply.
Market capitalization (market cap) is the total value of a cryptocurrency's circulating supply, calculated as current price × circulating supply. It's the primary metric for ranking and comparing crypto assets — Bitcoin is #1 with roughly $1-2 trillion market cap, followed by Ethereum. Market cap helps contextualize price: a $1 token with 10 billion supply ($10B market cap) is 'worth' more than a $1,000 token with 1 million supply ($1B market cap). Crypto is typically categorized as large-cap ($10B+), mid-cap ($1-10B), small-cap ($100M-$1B), and micro-cap (<$100M) — with risk and potential return generally increasing as market cap decreases. Important nuances: market cap doesn't equal money invested (a $1B market cap doesn't mean $1B was spent — a single trade at any price sets the market cap for all tokens). Fully diluted valuation (FDV) provides a more complete picture when significant supply is still locked.
Market capitalization (price × circulating supply) is the primary metric for ranking cryptocurrencies by total value, but it can be misleading without context. A token's market cap doesn't represent the actual money invested — it represents the last traded price multiplied by all circulating tokens, including tokens that haven't been sold. If a token has 1 billion units and someone buys 1 unit for $10, the market cap is $10 billion — even though only $10 was actually spent. This is why market cap can inflate dramatically during low-liquidity rallies and crash quickly during sell-offs. Market cap should always be evaluated alongside Fully Diluted Valuation (total supply × price), trading volume (indicating how much liquidity backs the valuation), and velocity (how frequently tokens change hands). Comparing market caps across projects requires understanding each token's utility and circulating vs total supply dynamics.
Dogecoin at $0.10 per coin has a larger market cap (~$14 billion) than many coins priced at $50-$100 per token — because Dogecoin has 140+ billion tokens in circulation while others might have only millions.
Market cap alone cannot determine valuation — you need to compare it to fundamentals like protocol revenue, TVL, user count, and growth trajectory. A $10B market cap for a protocol generating $100M in annual fees (100x revenue multiple) is very different from a $10B market cap for a memecoin with no revenue. Use market cap as a starting point, not a final answer.