Market Cap vs FDV vs Liquidity: Which Number Actually Matters?
Market cap, fully diluted valuation and liquidity measure very different things. Learn what each means for memecoins, low-float tokens and your exit.
TRENCHSCORE RESEARCH··3 MIN READ
Token pages throw three big dollar figures at you: market cap, FDV and liquidity. They're often quoted as if they mean the same thing. They don't — and mixing them up is one of the easiest ways to misjudge a token.
//Market cap
Market cap = price × circulating supply. It's what the tokens that can currently trade would be "worth" at the last traded price.
Important: market cap is a marked-to-last-trade number. Nobody could sell the whole supply at that price. A $5M market cap on a token with $50K of liquidity is $5M on paper only.
//FDV (fully diluted valuation)
FDV = price × total (or max) supply. It includes tokens that exist but aren't circulating yet — team allocations, investor tokens, ecosystem funds — plus, for some providers, tokens that haven't been minted.
- When circulating supply = total supply, market cap and FDV are the same. That's normal for most memecoins, especially fair-launched ones.
- When FDV is much higher than market cap, a big chunk of supply is still to come. Every unlock adds sellers.
Low float, high FDV
A "low float" token has a small circulating supply relative to its total. Low float can make price and FDV look impressive because there's little supply to trade. But scheduled unlocks then push new supply into the market. A large cliff unlock coming soon is far riskier than a slow linear release over years. Check the unlock schedule before buying any token where FDV is several times its market cap.
//Liquidity
Liquidity is the value actually sitting in the trading pool(s) — the money you can sell into. It's the only one of the three numbers that tells you what you could realistically get out. See why liquidity matters for how price impact works.
//Putting them together
| Number | Answers | Watch out for |
|---|---|---|
| Market cap | What the circulating supply is valued at | It's a paper value, not exit value |
| FDV | Value including future supply | Big gap to market cap = unlocks ahead |
| Liquidity | How much you can actually sell into | Small relative to market cap = fragile |
Two quick ratios help:
- Liquidity ÷ market cap. Higher is sturdier. Very low ratios mean the price can't absorb meaningful selling.
- Market cap ÷ FDV. Close to 1 means most supply is already trading. Far below 1 means dilution ahead.
//A note on memecoin market caps
On launchpads, market cap is often tiny at creation and climbs as the bonding curve fills. When tokens graduate from a bonding curve, their market cap and liquidity jump into a DEX pool. Also note some screeners use self-reported circulating supply to calculate market cap, so cross-check if the number looks odd.
//How TrenchScore shows it
Every token page shows market cap, FDV where available, and live liquidity side by side in the market panel, refreshed every minute. Market structure — including how liquidity compares to market cap — is part of the market pillar of the TrenchScore.
//Frequently asked questions
What is the difference between market cap and FDV?+
Market cap multiplies price by circulating supply; FDV multiplies price by total or maximum supply, including tokens not yet trading. A big gap means future unlocks or emissions.
Is a high FDV bad?+
Not by itself, but a FDV much higher than market cap means more supply will enter the market. Check the unlock schedule — large near-term cliffs are the main risk.
Why is liquidity more important than market cap?+
Market cap is a paper value at the last trade price. Liquidity is the money actually in the pool, which decides how much you can sell and at what price impact.
// Sources
Educational content, not financial advice. Crypto assets are highly risky and most new tokens lose most of their value — always do your own research.