The most quoted number in crypto is also the most misunderstood. Market capitalisation looks like a measure of size, value, even safety. It is none of those things. It is a multiplication.
In investment banking HR, I watched people value their unvested share awards at today’s share price, as though the vesting date, the price and their own staying power were all guaranteed. Paper value and money in the bank are different things. Crypto market cap is paper value on a very grand scale.
Price Times Supply
Market cap is simply the price of one coin multiplied by the number of coins in circulation. In mid October 2026, the whole crypto market was valued at roughly $2.8 trillion (US dollars), with bitcoin making up close to 60% of it. Even that headline figure depends on who you ask. On the same day, CoinMarketCap and CoinGecko, the two best-known data sites, put the total about $60 billion apart because they count circulating supply in slightly different ways. Bitcoin shows the logic at its simplest. Its supply is capped at just under 21 million coins released on a fixed and published schedule, so there are few surprises about what is still to come. For many newer tokens, the picture is far less clear.
The Coins That Have Not Arrived Yet
Circulating supply is only the coins in the market today. Many projects have far more still to come, held back for founders, early investors and future development, and released on a schedule called vesting. The total if every coin existed now is called the fully diluted valuation, and even this is calculated differently: CoinMarketCap uses the maximum supply, while CoinGecko uses the total supply.
The gap can be enormous. In 2024, Binance Research estimated that about $155 billion of tokens would be unlocked between 2024 and 2030, and noted that some newer tokens had only 6% to 20% of their supply in circulation. A small market cap can sit on a very large future supply.
What Unlocks Tend to Do
When locked coins are released, purchasers can sell. The trading firm Keyrock studied more than 16,000 unlock events across 40 tokens and found that 90% created downward pressure on prices. Prices often began to slip a month before the unlock, and releases to founders and teams tended to do the most damage, while unlocks used to fund development were the least harmful. This is the same lesson I watched play out with share awards: a vesting date changes behaviour long before it arrives.
The Cheap Coin Illusion
A quirk of the mind called unit bias; psychologists first described it in 2006, when they found that people treat one unit of something as the right amount, whatever its size. In crypto, it makes a coin priced at a fraction of a penny feel like a bargain. A 2024 study found stronger emotional reactions towards lower-priced coins.
But price alone tells you almost nothing. A coin at one cent with 100 billion coins in circulation has a $1 billion market cap, larger than many coins priced at hundreds of dollars. Cheap per coin is not the same as cheap.
Paper Value and Real Money
Market cap also says nothing about whether anyone would actually buy at that price. In thin markets, selling even a modest amount can move the price sharply. When the data firm Kaiko compared liquidity with market cap in 2022, it found that 7 of the top 15 tokens were harder to trade than their ranking suggested.
What I Take From It
I now look at three things before I give a token’s market cap any weight: how much is circulating, how much is still to come and when, and how easily it actually trades. None of this makes a small market cap good or a large one safe. It simply means the number needs company. The headline figure is where my questions start, not where they end, the same instinct behind my view that bitcoin and the rest of the market behave differently.
If this was useful, The Jacqueline Read arrives every Sunday with one clear lesson on money, markets and crypto. It is free, and I would love to see you there.
The Jacqueline Brand: knowledge builds confidence; confidence builds wealth.
This is editorial commentary for information and education only. It is not financial, investment or professional advice, and nothing here is a recommendation to buy or sell any investment. The Jacqueline Brand is not authorised or regulated by the Financial Conduct Authority. Where cryptoassets are discussed, they are high risk and largely unregulated in the UK, and you could lose all the money you invest. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Figures were correct at the time of publication. Always do your own research and consider speaking to a regulated adviser.
