What Is Market Cap? Meaning in Crypto and Memecoins
Market cap: Market cap (market capitalization) is a token's current price multiplied by its circulating supply: the market value of all tokens that can trade today.
Key takeaways
- Market cap = current price × circulating supply; it shows the value of all tokens that can trade today.
- Fully diluted valuation (FDV) uses the total supply instead; a big gap between market cap and FDV means more tokens can enter the market later.
- A memecoin's market cap is not money you can take out: selling into a small liquidity pool moves the price down fast.
Market cap (market capitalization) is a token's current price multiplied by its circulating supply. It tells you the market value of all tokens that can trade today. For memecoins, it is the number most traders use to say how "big" a coin is.
How market cap works
The formula is simple: price × circulating supply. CoinGecko calculates market cap this way and, for smart-contract tokens, gets circulating supply by deducting locked tokens from total supply (CoinGecko methodology). Fully diluted valuation (FDV) uses the total supply instead, as if all tokens already traded (CoinGecko on FDV).
Example: a new memecoin has 1 billion tokens and trades at $0.00005. Its market cap is $50,000. If buyers push the price to $0.0001, the market cap doubles to $100,000. In a small pool, the buys needed for that can be far smaller than the $50,000 the market cap added.
Why it matters for traders
Market cap is not exit money. The price comes from the last trade in a small liquidity pool, so a big sell gets heavy slippage and moves the price far down. Compare the market cap with the pool size and the top holders before you buy. On pump.fun, PumpSwap fees also fall as a coin's market cap grows, from 1.25% to 0.30% (pump.fun fees).