How market cap is calculated
Market cap is usually calculated by multiplying token price by circulating supply. It is a quick way to estimate the size of a crypto asset.
Fully diluted valuation uses maximum supply instead of circulating supply. That can show how large the valuation could look if all tokens were counted.
Why market cap can mislead
Market cap depends on accurate supply data and real market liquidity. A high price on tiny volume can make a token look bigger than it really is.
Locked tokens, future unlocks, insider allocations, and weak liquidity can all change how useful the number is.
How to use it carefully
Compare market cap with liquidity, volume, holder distribution, unlock schedules, and the project's actual progress.
Do not treat market cap as a safety score. It is one context number, not a complete research result.