What is FDV in Crypto? (Beginner’s Guide 2025)

What is Fully Diluted Valuation (FDV)?

Fully diluted valuation (FDV) is the total market value of a cryptocurrency once all tokens are in circulation— including all the tokens that haven't been mined or released yet. 

What’s the difference between FDV and market capitalization?

To better understand FDV, we understand how it differs from market capitalization. 

Market Cap: Market cap is calculated by multiplying the current price by the current circulating supply of tokens. Market cap does not include yet-to-be-released future tokens. 

Fully Diluted Valuation: FDV is calculated by multiplying current price by all currently circulating and future tokens. This makes FDV a more comprehensive measure of a project’s total market value, especially for early-stage projects that still have a significant amount of tokens yet to be released.

Why does FDV matter? 

FDV gives a more accurate reflection of the project’s future valuation by considering not just the current circulating supply, but also future inflation. 

A high FDV could signal a project is overvalued, especially if the circulating supply is small and there are large token unlocks scheduled.

Is high FDV a bad thing? 

In most cases, a high FDV relative to market cap should be considered a red flag. 

Low market cap, High FDV: Is it a trap? 

Let’s take a look at the risks of high FDV: 

• Inflationary pressure: If the FDV is significantly higher than the current market cap, future token releases could flood the market and reduce the value of each token. 
• Liquidity risks: A low market cap relative to FDV means that the cryptocurrency has relatively low liquidity — that means a decrease in demand could potentially lead to a price crash. 

When might high FDV be acceptable?

High FDV is not a bad thing in all situations. Here’s how a project can overcome high FDV relative to market cap: 

• Strong fundamentals: If the project has a solid utility and strong adoption metrics, it may be able to weather the inflationary pressure of high FDV. 
• Gradual token unlocks: If the project's tokenomics include a long vesting schedule with gradual unlocks, the risk of sudden inflation is reduced. This may give the market time to absorb new supply without significant price crashes.

What are token unlocks and how do they relate to FDV?

Token unlocks typically refers to the release of tokens that were set aside for early investors and/or other project insiders. When tokens are unlocked, insiders often sell — diluting the value of the cryptocurrency. 

Binance Research estimates that $155 billion worth of tokens will be unlocked between 2024 and 2030. This massive influx of tokens may impact the price of many up-and-coming projects. 

How do I evaluate an unlock schedule?

Before you invest in a cryptocurrency project, you should take some time to understand the token unlock schedule. Here’s what you should look out for: 

What is a ‘good’ token unlock?: A well-structured token unlock schedule gradually releases tokens over several years, reducing the risk of sudden price crashes. This approach aligns incentives between insiders and the broader community, ensuring long-term commitment to the project.

What is a ‘bad’ token unlock?: An aggressive unlock schedule—where a significant portion of tokens are released in a short period—can lead to rapid sell-offs and price volatility. 

How is FDV calculated? 

FDV is calculated by multiplying the current price of a token by the total supply, which includes both circulating tokens and tokens that will be released in the future.

FDV = Price per token x Total supply of tokens (circulating + future tokens)

For example, if a token is priced at $10 and has a total supply of 100 million tokens (including both circulating and future tokens), here’s how we would calculate FDV: 

FDV = $10 x 100,000,000 = $1 billion

Websites like CoinGecko and CoinMarketCap show the FDV and market cap for most cryptocurrencies. 

What are the limitations of FDV? 

While FDV is an important metric, it’s important to keep in mind its limitations: 

• Doesn’t reflect actual future value: Just because a project has a high FDV doesn’t mean it will ever reach that valuation. As more tokens enter circulation, inflationary pressure can push prices down, meaning the market cap may never come close to FDV.
• Doesn’t account for token distribution: FDV doesn’t tell you how tokens are distributed or the project’s token release schedule. As noted earlier, this may have a major impact on how inflation impacts future prices. 
• Ignores demand and utility: FDV doesn’t factor in whether the token has actual use cases or widespread adoption — which can help the project weather inflation. 

Don’t make investment decisions based on FDV alone. It’s important to consider FDV alongside other metrics like token utility, adoption, and the project's developer activity. 

Conclusion 

FDV is a valuable metric for assessing the long-term potential of a cryptocurrency, but it should not be your only focus. When you analyze FDV, make sure to take into account the project’s utility, adoption, and the distribution of its tokens.