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Market Cap Explained: The True Valuation Metric

The most common mistake new investors make is assuming a token priced at $0.01 is 'cheaper' or has more growth potential than a token priced at $100.

The Formula

Market Cap = Current Price × Circulating Supply

The Reality Check

If Token A costs $0.01 but has a circulating supply of 100 Billion, its Market Cap is $1 Billion.

If Token B costs $100 but has a circulating supply of only 1 Million, its Market Cap is $100 Million.

Token B is actually 10x smaller and theoretically requires much less capital influx to double in value compared to Token A, despite its higher individual coin price.

Always use Market Cap, not unit price, when comparing the size and growth ceiling of different projects on TokenRadar.

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