FDV fully diluted valuation

For educational purposes only; not investment advice. Investing may result in loss.

Direct answer

Fully diluted valuation (FDV) is a theoretical token valuation that applies the current market price to the supply assumed under a fully diluted scenario:

FDV = current token price × fully diluted supply

For a token with a hard cap, the fully diluted supply is commonly its maximum supply. For a token without a fixed cap, a data provider may use current total supply or another documented estimate. Always check the provider’s methodology before comparing figures.

Circulating market capitalization answers a different question:

Circulating market capitalization = current token price × circulating supply

FDV is not a forecast of future market capitalization, cash held by the project, or money that must enter the market. It keeps today’s marginal price constant while changing the supply assumption. CoinGecko therefore describes FDV as theoretical and notes that increasing circulating supply may itself change the price.

How it works

Supply labels are not interchangeable. Maximum supply is the theoretical cap permitted by the token’s rules. Total supply is generally the amount created minus tokens permanently burned. Circulating supply estimates the amount actively available to the public and normally excludes locked or reserved allocations. Different providers may classify treasury, foundation, team, staked, bridged, or migrated tokens differently.

A market price comes from marginal trades, not from valuing every token in one transaction. FDV extrapolates that price across the fully diluted supply. A thin market can therefore display a large FDV even though selling a sizable position would move the price sharply.

Two useful diagnostics are:

• Circulating ratio = circulating supply ÷ fully diluted supply
• FDV / market capitalization = fully diluted supply ÷ circulating supply

The second identity holds only when both figures use the same price and compatible supply definitions. A 10% circulating ratio implies a 10-times valuation gap under those assumptions, but it does not predict a 90% price decline.

FDV also changes when price or the relevant supply measure changes. Burns, new issuance, governance-controlled minting, token migrations, and revised data classifications can all alter the figure. For assets with no hard cap, any displayed FDV depends especially heavily on the provider’s chosen supply convention.

Example

Token A trades at $2.00, has 100,000,000 tokens circulating, and has a maximum supply of 1,000,000,000. Its circulating market capitalization is $200,000,000, its FDV is $2,000,000,000, and its circulating ratio is 10%.

Suppose 50,000,000 tokens are scheduled to unlock over the next 12 months. That equals 50% of today’s circulating supply. If the price stayed at $2.00 after all 50,000,000 entered circulation, circulating market capitalization would rise to $300,000,000 while FDV would remain $2,000,000,000. In practice, the price may change as the market absorbs the added supply, so this is a scenario calculation rather than a prediction.

Token B trades at $20, with 45,000,000 of a 50,000,000 maximum supply circulating. Its circulating market capitalization is $900,000,000, its FDV is $1,000,000,000, and its circulating ratio is 90%. Although B’s unit price is 10 times A’s, B has the lower FDV and much less remaining dilution. Unit price alone says nothing about whether a token is cheap.

Risks

Use FDV as a starting point, then verify the assumptions behind it:

• Record the price timestamp and the data provider’s definitions of maximum, total, and circulating supply.
• Review unlock dates and compare the next 30 days, 90 days, and 12 months of new supply with current circulating supply.
• Identify recipients, acquisition cost, vesting terms, and whether unlocked tokens can actually be sold.
• Compare prospective supply with order-book or pool depth; reported trading volume can count the same tokens changing hands repeatedly.
• Test whether usage, fees, token rights, and sustainable demand could grow alongside supply.
• Check minting authority, governance powers, burns, migrations, and any rule that can change the supply cap.

A large FDV-to-market-cap gap signals potential dilution, not automatic selling. Unlocks can be anticipated, recipients may hold, and demand may grow. Conversely, a modest gap does not remove risk if a large low-cost allocation unlocks at once into a shallow market.

FDV is also not a complete valuation model. It does not measure treasury assets, protocol cash flow, legal rights, ownership concentration, product-market fit, or liquidity. The CFTC warns that token value can be affected by future demand, competing technology, links to the underlying product, and market liquidity; those factors cannot be reduced to one supply multiple.

Common misconceptions

Myth 1: FDV is the market capitalization a token will reach

FDV freezes today’s price and changes the supply assumption. Future price and supply can both differ, so FDV is a comparison metric, not a target.

Myth 2: A 10-times FDV gap guarantees a 90% price decline

The gap measures supply under stated assumptions. Price response depends on timing, expectations, holder behavior, liquidity, and demand.

Myth 3: A small circulating market capitalization means a low valuation

Low circulation can make current market capitalization look small while FDV remains large. Compare both figures and the release schedule.

Myth 4: A high FDV proves that a project is overvalued

A high FDV raises the valuation hurdle, but assessing it still requires comparable projects, usage, cash flows or token rights, growth, and risk.

Myth 5: FDV is identical on every data platform

Providers may use maximum supply, total supply, or an estimate and may classify burns or migrated tokens differently. Confirm the displayed methodology before comparing assets.

Related topics

• What is the difference between circulating market capitalization and FDV?
• Multi-signature wallet
• PoS Proof of Stake
• Token unlock
• Tokenomics

Sources

• Fully Diluted Valuation - CoinGecko (accessed: 2026-08-20)
• CoinGecko Supply Methodology - CoinGecko (accessed: 2026-08-20)
• Use Caution When Buying Digital Coins or Tokens - CFTC (accessed: 2026-08-20)