What is market cap

Market cap is a multiplication. Take the price of one coin and multiply by the number of coins counted as outstanding. A coin at $100 with 10 million coins outstanding has a market cap of $1 billion. Nothing in that sentence says $1 billion changed hands. It says the coins, at the last price, would be worth that much if every coin were valued at the last trade. They cannot all be sold at the last trade. The last trade was for the size that actually traded.

The October 9 comparison on this desk is the clean example. CoinGecko's Ethereum market cap was $303.8 billion, from a price of $2,487.23 and 122.12 million ETH. Stablecoin Beat's stablecoin supply was $303.9 billion the same evening. The two numbers met. They are not the same kind of number. One is a price times a supply of a coin that floats. The other is tokens counted at one dollar because they are meant to be one dollar. The piece is here: https://cryptokeymedia.com/news/stablecoin-supply-matches-ethereum

Circulating supply is the argument inside the multiplication. Some counts leave out coins still locked for a team. Some leave out coins that are lost. Some include them. Two sites can print two market caps for the same coin on the same hour because they disagree on the supply, not because the price differed. The price is the part a reader can see on a tape. The supply is the part the site chose. Both belong in the citation.

A fully diluted figure is the price times the supply if every locked coin were already out. It is larger, and it describes a day that has not arrived. Using it as today's market cap pretends the unlocks have happened. Using only the circulating figure pretends the locked coins do not exist. A careful line names which one it is. A headline that says market cap and does not say which supply is using the circulating number, usually, and hoping the reader does not ask.

Market cap is not open interest. Open interest is the futures contracts still open. A coin can have a small market cap and a large perpetual book, or the reverse. Adding them produces a number with no meaning. Market cap is also not the treasury of a project. A project that holds its own coins cannot spend the market cap. It can sell coins, and selling them is what would move the price the market cap was built on.

Rankings follow the multiplication. A coin moves up the list when its price rises faster than the coins above it, or when a tracker changes the supply it uses. A one percent move in a large coin is more dollars of market cap than a ten percent move in a small one. Ethereum's October 9 print was the case. A one percent change in the ETH price was about $3 billion of market cap, far more than the gap that made the stablecoin comparison look exact.

The figure updates when the price updates. There is no close. A market cap quoted in a story is the print at a time, on a named site. An hour later the multiplication has a new price in it. That is not a revision of the story. It is the definition working. A story that needs the number to stay still has picked the wrong number.

What comes next is the next price, and the market cap will follow it. Supply changes slowly, when coins are issued or when a tracker changes its rule. Price changes constantly. Market cap is those two, multiplied, on the site the reader has open. It is not cash, it is not a stablecoin's supply, and it is not the contracts still open.