# Why Is 'Fully Diluted Valuation' (FDV) Often Higher than Market Cap? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

---

## Why Is ‘Fully Diluted Valuation’ (FDV) Often Higher than Market Cap?

FDV is calculated using the total supply (or maximum supply) of a coin, while Market Cap uses the circulating supply. Since total supply often includes tokens that are locked or not yet minted, FDV represents the asset's value if all tokens were in circulation, making it typically higher.

- [What Is the Difference between Fully Diluted Valuation (FDV) and Market Capitalization?](https://learn.greeks.live/path/what-is-the-difference-between-fully-diluted-valuation-fdv-and-market-capitalization/)

- [How Does the Concept of ‘Fully Diluted Valuation’ (FDV) Relate to Vesting?](https://learn.greeks.live/path/how-does-the-concept-of-fully-diluted-valuation-fdv-relate-to-vesting/)

- [Why Is the Market Capitalization of a Token Often a Misleading Metric for Valuation?](https://learn.greeks.live/path/why-is-the-market-capitalization-of-a-token-often-a-misleading-metric-for-valuation/)

- [How Is the Fully Diluted Valuation (FDV) Calculated?](https://learn.greeks.live/path/how-is-the-fully-diluted-valuation-fdv-calculated/)

- [What Is a “Fully Diluted Valuation” (FDV) and Why Is It Important for New Tokens?](https://learn.greeks.live/path/what-is-a-fully-diluted-valuation-fdv-and-why-is-it-important-for-new-tokens/)

- [How Does the Release of Vested Tokens Affect the Fully Diluted Valuation (FDV)?](https://learn.greeks.live/path/how-does-the-release-of-vested-tokens-affect-the-fully-diluted-valuation-fdv/)

- [What Is Fully Diluted Valuation (FDV) and Why Is It Used in Comps?](https://learn.greeks.live/path/what-is-fully-diluted-valuation-fdv-and-why-is-it-used-in-comps/)

- [How Does the Concept of ‘Circulating Supply’ Differ from ‘Total Supply’?](https://learn.greeks.live/path/how-does-the-concept-of-circulating-supply-differ-from-total-supply/)

## Glossar

### [Market Cap](https://learn.greeks.live/area/market-cap/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Capitalization ⎊ The market capitalization, often abbreviated as market cap, represents the total dollar market value of a cryptocurrency, options contract, or financial derivative.

### [FDV](https://learn.greeks.live/area/fdv/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Valuation ⎊ Fully Diluted Valuation (FDV) represents the theoretical market capitalization of a cryptocurrency project if all tokens were currently in circulation.

### [Cap](https://learn.greeks.live/area/cap/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Strike ⎊ Cap, within cryptocurrency derivatives, denotes the predetermined price level at which an option contract ⎊ typically a call or put ⎊ may be exercised.

### [Total Supply](https://learn.greeks.live/area/total-supply/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Circulation ⎊ Total Supply, within cryptocurrency, defines the amount of a given digital asset currently available for public use and trading, representing a critical metric for assessing market capitalization and potential price dynamics.

## Discover More

### [How Does a 'Testnet' Launch Milestone Impact a Project's Valuation?](https://learn.greeks.live/path/how-does-a-testnet-launch-milestone-impact-a-projects-valuation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a 'Testnet' Launch Milestone Impact a Project's Valuation?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetric-Dualistic-Volatility-Surface-Representation-in-Decentralized-Finance-Derivatives-Protocol-Architecture.webp)

Validates technical execution and allows public testing, significantly increasing investor confidence and valuation.

### [Why Is the Market Capitalization of a Token Often a Misleading Metric for Valuation?](https://learn.greeks.live/path/why-is-the-market-capitalization-of-a-token-often-a-misleading-metric-for-valuation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is the Market Capitalization of a Token Often a Misleading Metric for Valuation?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Ledger-Technology-Analogous-Time-Series-Measurement-via-Bifurcated-Indicator-on-Circuit-Board-Substrate.webp)

Market cap is misleading due to low liquidity, reliance on circulating supply, and ignoring the fully diluted valuation (FDV).

### [Why Is Speculation Considered a Higher-Risk Activity than Hedging?](https://learn.greeks.live/path/why-is-speculation-considered-a-higher-risk-activity-than-hedging/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is Speculation Considered a Higher-Risk Activity than Hedging?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Decentralized-Finance-Volatility-and-Derivative-Hedging-Mechanics.webp)

Speculation creates new risk for potential profit, while hedging reduces existing risk, making it inherently a safer strategy.

### [How Does the Inclusion of Stablecoins in the Total Market Cap Calculation Affect the Utility of the Bitcoin Dominance Ratio?](https://learn.greeks.live/path/how-does-the-inclusion-of-stablecoins-in-the-total-market-cap-calculation-affect-the-utility-of-the-bitcoin-dominance-ratio/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Inclusion of Stablecoins in the Total Market Cap Calculation Affect the Utility of the Bitcoin Dominance Ratio?](https://learn.greeks.live/wp-content/uploads/2025/10/Balancing-Blue-Spheres-and-Intersecting-Arms-Representing-Volatility-Surface-Dynamics-in-Crypto-Derivatives.webp)

Stablecoins inflate the total market cap, artificially lowering Bitcoin's dominance and giving false signals about risk appetite.

### [How Do Different Valuation Models like the Stock-to-Flow Model Compare to Metcalfe's Law for Crypto?](https://learn.greeks.live/path/how-do-different-valuation-models-like-the-stock-to-flow-model-compare-to-metcalfes-law-for-crypto/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Different Valuation Models like the Stock-to-Flow Model Compare to Metcalfe's Law for Crypto?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Rendering-of-High-Frequency-Trading-Signal-Propagation-Through-Decentralized-Autonomous-Organization-Oracles.webp)

S2F focuses on scarcity and supply economics; Metcalfe's Law focuses on network utility and adoption size.

### [What Is Metcalfe's Law and How Does It Relate to Blockchain Valuation?](https://learn.greeks.live/path/what-is-metcalfes-law-and-how-does-it-relate-to-blockchain-valuation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is Metcalfe's Law and How Does It Relate to Blockchain Valuation?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Optical-Component-Alignment-in-High-Frequency-Decentralized-Exchange-Infrastructure.webp)

Value is proportional to the square of the number of users, predicting exponential growth from network size.

### [In Derivatives, What Mechanism Is Analogous to a Cryptocurrency's Hard Cap?](https://learn.greeks.live/path/in-derivatives-what-mechanism-is-analogous-to-a-cryptocurrencys-hard-cap/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![In Derivatives, What Mechanism Is Analogous to a Cryptocurrency's Hard Cap?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetrical-Bifurcation-in-Digital-Asset-Liquidity-Pool-Surface-Tension-Dynamics.webp)

The fixed, standardized contract size of a futures contract is conceptually analogous to a cryptocurrency's hard cap, representing a fixed unit of value.

### [Why Is the Market Capitalization of a Token Often Misleading without considering Vesting?](https://learn.greeks.live/path/why-is-the-market-capitalization-of-a-token-often-misleading-without-considering-vesting/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is the Market Capitalization of a Token Often Misleading without considering Vesting?](https://learn.greeks.live/wp-content/uploads/2025/10/Streamlined-Token-Structure-Encapsulating-Digital-Asset-Volatility-Premium-Derivations-Across-Exchanges.webp)

MC is misleading because it ignores unvested tokens; a high FDV relative to MC signals significant future dilution risk.

### [Why Is the Initial Margin Set Higher than the Maintenance Margin?](https://learn.greeks.live/path/why-is-the-initial-margin-set-higher-than-the-maintenance-margin/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is the Initial Margin Set Higher than the Maintenance Margin?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Protocol-Configuration-Representing-Complex-Volatility-Surface-Dynamics-in-Digital-Asset-Hedging.webp)

To create a necessary price buffer between the entry point and the liquidation point, managing risk effectively.

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