Crypto applications
The idea
Market capitalization multiplies a quoted price by a supply measure; it does not show how much cash could be withdrawn at that price. Thin order books and concentrated holdings can magnify slippage. Circulating supply, fully diluted supply and scheduled unlocks describe different quantities.
A worked example
A small trade can set the displayed price of a thin token, producing a large apparent market capitalization without deep exit liquidity.
Try it yourself
Compare an example order-book depth with the planned order size and record which supply definition is being used.
A mistake to avoid
Assuming a low token price means the asset is cheap without considering supply.