When comparing a token priced at $1 with one priced at $100, check how many units exist as well as the unit price. A lower unit price does not, by itself, mean the asset is undervalued.

Put supply next to the price

Consider two fictional tokens, using prices and circulating supplies measured at the same time.

Token A: $1 per token × 1 billion circulating tokens = $1 billion market capitalization.

Token B: $100 per token × 5 million circulating tokens = $500 million market capitalization.

A has the lower unit price, yet its circulating market value is twice as large. Neither calculation tells us which project deserves that valuation.

A larger market cap is not a larger cash account

Market capitalization applies the current quoted price to the circulating supply. It does not measure how much cash investors have put in, and it is not a pool of money waiting to pay sellers.

Keep A’s supply unchanged and let its quoted price move from $1 to $1.10. Its calculated market cap increases from $1 billion to $1.1 billion. That arithmetic does not prove that buyers deposited another $100 million. The price can move as trades meet the orders available in the market.

For the same reason, multiplying all tokens by today’s quote does not mean all holders could sell at that price. The size and prices of available buy orders matter.

Market cap vs. FDV: check the supply not yet circulating

Suppose fictional token A has a maximum supply of 10 billion tokens. At the same $1 quote, a calculation using that maximum supply gives a fully diluted valuation, or FDV, of $10 billion. That is a scenario using today’s price, not a forecast of a future market cap.

Check the data provider’s definition: FDV may use total supply or maximum supply. Also check what supply is still locked, when it may become transferable and whether future issuance can change the figures. An unlock schedule is information about supply; it is not a guarantee that the price will fall on a particular date.

A useful comparison starts with three questions

Are the price and supply figures from the same point in time? Which supply definition is being used? Is there enough market liquidity for the size of transaction being considered?

These checks make the numbers more meaningful. They do not establish fair value or turn a low-priced token into a bargain. The two tokens and all dollar figures above are invented solely to explain the calculation; no purchase is being recommended.

Next in this series: APR versus APY, and how a token balance can grow while its dollar value falls.

Definition and supply distinctions: Binance Academy — Market Capitalization.

https://www.binance.com/en/academy/glossary/market-capitalization