Price vs market cap
Why a coin's price tells you almost nothing on its own, and how market cap tells you what the whole coin is worth.
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Open any memecoin and the first number you see is the price. It usually looks tiny, something like $0.00004. Newcomers see that and think 'cheap'. It is the most common mistake in the trenches, so this track starts here.
Price is the cost of one token
The price is what one single token costs right now. On its own it says nothing about how big the coin is, because a coin can have a thousand tokens or a trillion.
Market cap fixes that. Market cap is the price times the number of tokens. It is the value the market puts on the whole coin at this moment, and it is the number you should compare between coins.
Two coins, same price, very different size
Coin A and Coin B both trade at $0.0001 per token.
- Step 1: Coin A has 1 billion tokens. Market cap: $0.0001 times 1,000,000,000 = $100,000.
- Step 2: Coin B has 1 trillion tokens. Market cap: $0.0001 times 1,000,000,000,000 = $100 million.
- Step 3: Same price, but B is already 1,000 times bigger. For A to double, the market needs to add $100,000 of value. For B to double, it needs $100 million.
Why 'it is only $0.0001' is a trap
The feeling has a name: unit bias. People like owning millions of something. A coin at $0.00002 feels like it has room to run, and a coin at $40 feels expensive. Both feelings are wrong. What matters is how big the coin is now and how big it could realistically get.
Almost every coin launched on pump.fun starts with 1 billion tokens. Mayhem mode coins start with 2 billion, and burns can take a coin a little under its starting number, so glance at the supply on the coin's page. With 1 billion tokens the math is easy: you only move the decimal point. A price of $0.00005 is a $50,000 market cap. A price of $0.001 is a $1 million market cap.
Can it reach $1?
You will see people ask whether a coin can 'reach $1'. For a coin with 1 billion tokens, $1 means a $1 billion market cap. Only a tiny fraction of memecoins have ever got there. The honest version of the question is 'can this go from $200,000 to $2 million?', and even that needs a tenfold move that most coins never make.
Market cap, FDV and supply
FDV, fully diluted value, is the price times every token that exists, minus any that were burned. Market cap uses only the tokens in circulation. For most Solana memecoins every token is out there from the first minute, so the two numbers match. DEX Screener says the same thing in its docs: in most cases FDV and market cap are equal.
They differ when part of the supply is locked away, for example in a vesting contract. A project can then report a smaller circulating supply, and the market cap looks smaller than the FDV. When you see a big gap between the two, ask where the missing tokens are and when they can be sold.
Market cap as a size label
Think of market cap as a size label, not a score. Traders loosely group coins like this:
| Market cap | What it usually means |
|---|---|
| Under $50,000 | Just born, often still on its launchpad. Most coins never leave this band. |
| $50,000 to $1 million | Some real buyers. Very fast moves in both directions. |
| $1 million to $10 million | A coin people are talking about. Still very risky. |
| Above $10 million | Usually a real community. Slower moves, and it can still go to zero. |
Market cap has one more weakness. On a thin coin a single buy can move it a lot, so the number can be real for a minute and gone the next. How much of it you could actually turn back into money is a different question, and the next lesson answers it.
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This guide is for learning. It is not financial advice. Most memecoins go to zero and most people who trade them lose money. Only ever trade what you can afford to lose.