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Market cap and FDV
Market cap multiplies the price by the coins that are already trading. Fully diluted value multiplies the price by every coin that could exist. The second number is often much larger, and easier to hide.
Fully diluted value uses coins that are not trading yet. It is often the larger number, and the one left off the poster.
A worked case
A coin is described as cheap because the market cap is small. The fully diluted value is four times larger. The cheapness was the coins that had not unlocked. The buyer compared the wrong product of price and supply.
The two numbers
A low circulating supply makes the market cap look small and the room to unlock look large. FDV asks: if everything that can be issued were issued at today's price, what would that be.
What each hides
Market cap hides the future supply. FDV pretends today's price would survive that supply, which it may not. Neither number is a valuation a business earned.
If the gap between them is huge, someone is waiting to be paid in coins.
The small number was the coins that had not unlocked
Market cap multiplies a price by the coins that are already trading. Fully diluted value multiplies the same price by every coin the contract can create, including the ones still locked for the team, the investors, and the treasury. In listing after listing through the 2021 cycle, the number in the headline was the smaller one. The larger one sat in a tab called tokenomics, or nowhere.
The arithmetic is not a prediction. A low market cap does not mean cheap if the diluted value is several times higher and the extra coins unlock into the same market. It means you are looking at today's float. Terra's Luna was a brutal version of supply that could expand: defending the stablecoin minted more Luna, and the fully diluted story became infinite in practice. The SEC's account of that collapse is the record of a supply that was not the number people had in their heads.
Write both numbers down before you call anything cheap. If you only have one, you have the poster.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
Sellers of the coins that already trade, and later the ones that unlock.
The supply schedule.
New supply, when it becomes sellable.
Check yourself
Does a small market cap mean a cheap coin?
Not if most of the supply is still locked and will unlock.
After this you can compare circulating supply with the full supply before you call something cheap.