Crypto Terms: Letter F

What is Fully Diluted Market Cap?

Fully Diluted Market Cap MEANING:
Fully Diluted Market Cap - an approximate prediction of the asset’s market cap, assuming that all tokens are in circulation.
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Let's find out Fully Diluted Market Cap meaning, definition in crypto, what is Fully Diluted Market Cap, and all other detailed facts.

Market cap is the total value of a crypto asset in the market. A fully diluted market cap, on the other hand, is the total value of a particular crypto asset, calculated under the assumption that all of the project's tokens have already been distributed.

It’s determined by multiplying the current price of an asset by its max supply. The current market cap, on the other hand, is calculated by multiplying the current circulating supply by the current price of the asset.

Keep in mind that the fully diluted market cap may not be the most accurate estimate of the asset’s future price. This is the case because it disregards any potential price decreases, and assumes that the future market cap will rise in direct proportion to circulating supply.

For instance, note that, occasionally, when the supply of the token increases, the price of the token may decrease if the supply is greater than its demand. This would result in excess supply, which could lead to inflation. Thus, traders should not rely solely on the fully diluted market cap while making decisions about their future investments.