Newcomers to the crypto space often wonder why prices vary so drastically across different cryptocurrencies. For instance, among the top 10 cryptocurrencies:
- Tether (USDT): $1
- Binance Coin (BNB): $228.21
- TRON (TRX): $0.07
- Solana (SOL): $15.23
How can these coins rank similarly despite such wild price differences? The answer lies in market capitalization—not individual token prices.
Price Is Irrelevant—Market Cap Tells the Real Story
Cryptocurrencies are issued by independent projects, each with unique:
- Use cases (e.g., payments, smart contracts).
- Economic models (e.g., fixed supply, inflationary).
- Total supply (e.g., Bitcoin’s 21M vs. Cardano’s 45B).
Market cap (= price × circulating supply) levels the playing field:
| Cryptocurrency | Price | Circulating Supply | Market Cap |
|---|---|---|---|
| Bitcoin (BTC) | $25.8K | 19.4M BTC | ~$501B |
| Ethereum (ETH) | $1,740 | 120.2M ETH | ~$209B |
Though Bitcoin’s price is 15x Ethereum’s, its market cap is only ~2.5x larger. This disparity arises from supply differences—making market cap a fairer comparison metric.
Market Cap vs. Fully Diluted Valuation (FDV)
Not all tokens are fully released yet. Thus, two metrics matter:
- Market Cap: Price × current circulating supply.
- FDV: Price × max total supply (including future releases).
Example: A token with a $10M market cap but $500M FDV might seem "cheap"—but its growth potential could be limited by future supply inflation. Always check both!
Why Crypto Rankings Prioritize Market Cap Over Price
Top 10 cryptocurrencies are ordered by market cap, not price. USDT ($1) outranks BNB ($228) because its market cap is higher.
👉 Learn how market cap impacts trading strategies
"This Coin Is Too Expensive!"—Debunked
- **Bitcoin at $25K?** You don’t need to buy a whole coin—purchase **satoshis** (0.00000001 BTC). Even if BTC hits $100M, 1 satoshi = $1.
- All cryptocurrencies (except NFTs) are divisible.
The Allure of Low-Price Tokens—And Its Risks
Coins like Pepe (PEPE) ($0.00000053) tempt investors because:
- Perception of affordability: $100 buys millions of tokens.
- Decimal blindness: A 10x jump from $0.00000053 to $0.0000053 feels trivial—but it’s identical to BTC rising from $25K to $250K.
- Speculative hype: Misunderstanding market cap leads to overestimating "cheap" coins.
Caution: Low-price tokens often carry higher volatility and pump-and-dump risks.
FAQs
Q: Should I buy cryptocurrencies with low prices?
A: Base decisions on market cap, utility, and team credibility—not price.
Q: How is market cap calculated?
A: Market Cap = Current Price × Circulating Supply.
Q: Why does FDV matter?
A: It reveals potential dilution from future token releases.
Q: Can I buy fractions of Bitcoin?
A: Yes! Exchanges allow purchases as small as 1 satoshi (0.00000001 BTC).
Key Takeaways
- Ignore price—focus on market cap for true valuation.
- Check FDV to avoid supply-inflation traps.
- Low-price tokens ≠ better investments.
👉 Master crypto investing with these pro tips
Sources: FX168, Golden Finance.