Understanding market cap & supply
Why a low price per token does not mean a token is "cheap".
Two tokens can have wildly different prices and be worth exactly the same overall. The number that matters is market cap, and it only makes sense once you understand supply. This guide connects the two.
Market cap = price × supply
Market capitalization is the total value of every token in existence: the price of one token multiplied by how many exist. It is the fairest single measure of how "big" a token is.
That is why price alone is misleading. A token at $0.0001 with a billion in supply is far larger than a token at $1 with only a thousand in supply.
Kinds of supply
"Supply" can mean different things, and the difference matters:
- Total supply — how many tokens exist right now.
- Circulating supply — how many are actually available to trade (not locked or held back).
- Max supply — the hard cap, if there is one. On HOLYHOOD each token launches with a fixed supply.
Using market cap sensibly
Market cap helps you compare tokens on the same footing and spot when a token’s valuation has run far ahead of its community. A very high market cap does not make a token safe — it can still fall to zero.
Be especially wary of "fully diluted" figures that assume every possible token is in circulation; the tradable reality can be much smaller.
- Market cap = price per token × supply — it, not price, tells you a token’s size.
- Total, circulating, and max supply are different numbers; know which one you are reading.
- A big market cap is not a safety guarantee.
References & further reading
Fun tokens are experimental and highly speculative. Prices can move fast in both directions and you could lose everything you put in. Nothing here is investment advice.