Fully Diluted Valuation (FDV)
Fully Diluted Valuation (FDV) is a theoretical valuation of a token that accounts for the entire supply. It applies the current price to all tokens, including those that aren’t circulating yet.
What does FDV measure?
FDV is usually calculated by multiplying the current price of one token by the maximum number of tokens that can exist. This maximum amount is also called the max supply.
Market cap only counts tokens that are already circulating, meaning they’re currently available on the market. FDV also includes tokens that are still locked or will be issued later.
Keep in mind that some data providers use the total existing supply instead of the maximum supply. So check which supply measure they use.
An example of FDV
Suppose a token costs $2. There are 10 million tokens in circulation, and the maximum supply is 100 million tokens.
The circulating market cap would be $20 million. The FDV would be $200 million: $2 multiplied by 100 million tokens. This doesn’t mean all future tokens will also be worth $2.
Why does FDV matter in crypto?
FDV helps you compare a valuation based on the entire supply with one based on the tokens currently in circulation. A large difference may mean that many tokens aren’t available yet.
That’s why you’ll often see FDV mentioned around token launches, token distributions, and announcements about the release of locked tokens. The issuance and release schedule shows when additional tokens may become available.
FDV doesn’t predict a future price or show how much money has actually been invested in a project. More tokens becoming available can create selling pressure, but demand, liquidity, and market conditions also play a role.
