What Is Fully Diluted Valuation (FDV) in the Crypto Market?
Ever looked at a token and thought, “This seems cheap,” only to find out millions more tokens are set to hit the market? That’s where fully diluted valuation (FDV) comes in. FDV estimates what a crypto project would be worth if every token that will ever exist were already in circulation - valued at today’s price.
FDV has become a go-to metric for investors who want to look beyond surface-level numbers. In a fast-moving market, it helps you judge both upside potential and dilution risk - especially with new or evolving projects.
Quick example: If a token trades at $5 and the maximum supply is 100 million, FDV is $500 million - even if only a fraction of those tokens are currently tradable.
With new coins launching weekly and token models changing constantly, understanding FDV can help protect your portfolio and guide smarter decisions.
Key notes:
Fully diluted valuation (FDV) calculates a crypto project’s potential value by multiplying the current token price by the maximum total supply, revealing the impact of future token releases.
FDV gives an early warning about possible dilution risks, especially when the gap between FDV and market capitalisation is wide due to a low circulating supply.
Tokenomics (like vesting schedules, burns, and emissions) and shifting market sentiment are the primary factors driving FDV fluctuations and their relevance to price action and investment strategy.
FDV is best used alongside market capitalisation, fundamentals, liquidity, and real‑time supply data, recognising its limitations and integrating it into broader crypto research.
How Is FDV Calculated?
The formula is straightforward:
FDV = Current token price × Total token supply
Where:
Token price: Today’s market price per token
Total token supply: The maximum number of tokens that will ever exist
A common confusion point: circulating supply vs total supply. Market capitalisation uses circulating supply (the tokens actually trading right now), while FDV uses the eventual total supply—including locked, vested, or future tokens. Think of circulating supply as the slice of pie you can eat today and total supply as the whole pie still baking in the oven.
Where to find these numbers:
Data sites: ICONOMI, CoinGecko, CoinMarketCap
Project sources: whitepaper, tokenomics docs, and official websites
For illustration purposes, let's assume the following example using the coin SOL (Solana):
Token price: $80
Total token supply: 550,000,000 SOL
Calculation:
FDV = $80 × 550,000,000 = $44,000,000,000
You can verify supply figures on sites like ICONOMI or in the project’s documentation. Now compare this with market capitalisation (which uses only the circulating supply). The gap between market cap and FDV shows how much room there is for dilution as more tokens unlock.
Why FDV Matters to Crypto Investors
FDV gives you a forward-looking snapshot: What would this project be worth if every token were already in the market at today’s price? Market cap tells you what’s trading now; FDV hints at what could happen as locked tokens unlock.
If FDV is much higher than market cap, it signals potential dilution ahead. As new tokens enter circulation—via vesting, rewards, or unlocks—they can add selling pressure or increase volatility. That said, if a project has strong fundamentals and growing adoption, a higher FDV can also reflect long-term potential.
Here's a practical tip: Check the token unlock schedule. Big cliffs or frequent emissions can materially affect price action around those dates.
Explore: How to Buy Crypto: Copy a Successful Crypto Strategy
The Key Differences Between FDV and Market Capitalisation
Let’s clearly distinguish these two vital metrics in crypto investing:
| Metric | Formula | Focus Feature | Best For |
| Market Capitalisation | Token Price × Circulating Supply | Current market value | Gauging traded project size |
| Fully Diluted Valuation | Token Price × Total Token Supply | Future potential value | Assessing total growth/risk |
To illustrate things better, let's picture the following scenario: a project has a total supply of 1 billion tokens but only 100 million are in circulation. At a token price of $2. In this case:
Market Cap = $2 × 100,000,000 = $200,000,000
FDV = $2 × 1,000,000,000 = $2,000,000,000
This stark difference alerts you to future dilution risk, especially with a low float (small circulating supply).
Understanding both metrics helps investors weigh current size against ultimate scale, refining investment strategies and portfolio management.
The 2 Factors that Influence FDV
Two things move FDV more than anything else: how a token’s supply is designed and how the market feels on any given day.
Think of tokenomics as the rulebook and sentiment as the weather—one sets the structure, the other changes fast and can catch you off guard.
Tokenomics
On the tokenomics side, vesting schedules drip tokens into circulation for teams, advisors, and early investors. When big unlocks hit, it can add selling pressure and widen the gap between market cap and FDV.
Burns work in the opposite direction by permanently removing tokens from supply, which can lower FDV over time if price holds. Minting expands the total supply, increasing FDV, while staking and mining rewards steadily release new tokens into the market.
Airdrops distribute tokens to users, often boosting circulating supply and influencing short‑term price dynamics. If you’re trying to anticipate where FDV might go next, the most practical step is to read the tokenomics section of the whitepaper and check on-chain data or block explorers for upcoming releases and burn mechanics. It’s not glamorous, but it’s where the answers usually are.
Market sentiment
Market sentiment is the other major driver. Because FDV uses the current price, any swing in sentiment—good or bad—flows straight through to the number.
A partnership announcement, a new listing, or a sharp change in regulatory tone can move price in minutes, which means FDV moves too, even if the total supply hasn’t budged. When the crowd gets excited, FDV can jump overnight; when the mood sours, it can deflate just as quickly.
How to Use FDV in Your Trading Strategy
When you fold FDV into your trading strategy, treat it as both an early warning system and a sense check. A wide gap between market cap and FDV can hint at future sell pressure as more tokens come online, while a tighter gap suggests most of the supply is already in the market.
Map upcoming unlocks, watch for catalysts that can swing price (and FDV) quickly, and size positions with potential dilution in mind. With that lens in place, the next section highlights FDV’s blind spots so you don’t over-rely on a single number, followed by practical habits that keep your analysis grounded and actionable.
With that in mind, let's explore the limitations and the best practices of using this metric in your trading strategy below.
You may also like to read: What is an Order Book and How Does It Work in Crypto?
Limitations and considerations when using FDV
FDV is useful, but it has blind spots. It assumes today’s price will still make sense when more tokens enter the market, which is rarely how things play out. FDV also can’t tell you whether demand will keep up with new supply; if a large unlock arrives and buyers hesitate, price may slide, and yesterday’s FDV will look optimistic in hindsight
Thin liquidity, restricted floats, or outright manipulation can distort both price and the perception of scarcity, making FDV appear healthier than the underlying market. And for tokens without a clear maximum supply, the metric loses much of its meaning—if you don’t know the cap, you can’t reliably calculate the “fully diluted” part.
The takeaway is simple: treat FDV as a lens, not a crystal ball. Pair it with fundamentals, liquidity data, and a clear view of upcoming supply changes before drawing conclusions.
Best practices for using FDV in your crypto research
Start by placing market capitalisation and FDV side by side. If the gap is wide, you may be looking at meaningful dilution ahead; if it’s narrow, most of the supply is likely already trading.
From there, dive into fundamentals: who’s building the project, what problem it solves, how engaged the community is, and whether the roadmap shows real progress. Read the tokenomics with care—look for long vesting timelines, unlock cliffs, ongoing emissions, and burn policies—and note the dates that could drive volatility.
Keep an eye on live data as well. Sites like CoinGecko and CoinMarketCap, along with project explorers, can help you track circulating and total supply changes in real time.
Watching the relationship between market cap and FDV over weeks and months is more insightful than a single snapshot. Above all, treat FDV as one input among many. Good research is cumulative: fundamentals, supply, liquidity, and sentiment all matter.
Conclusion: FDV is one tool for smarter crypto investing
FDV brings a much‑needed, forward‑looking angle to crypto research. It helps you gauge how full supply might shape future value so you can compare projects more fairly and set realistic expectations.
Use it alongside fundamentals and on‑chain data, and you’ll make steadier decisions over the long run. If you want a structured way to put this into practice, ICONOMI can serve as a reliable platform for managing and tracking your crypto strategy—just remember, it’s your research that ultimately moves the needle.
So, don't hesitate to explore more guides like this one in our resources and informative articles!
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