Market capitalisation is quoted as though it were the amount of money held in an asset. It is a multiplication, and the two numbers it multiplies do not combine into anything that could be withdrawn.
The figure is a price applied to a quantity
Market capitalisation multiplies the most recent trade price by the circulating supply. The price came from one transaction, possibly a small one, at a single moment.
That price is then applied to every unit in existence, including those that have not traded for years and those whose holders have no intention of selling.
Nothing about the calculation reflects how much capital entered the asset. Money spent buying and money received selling never appear in it.
Order books are shallow relative to supply
The resting orders on an exchange represent a small fraction of any asset's total supply, and they thin out quickly as prices move away from the current level.
Selling into that book pushes the price down as each layer is consumed, so realised proceeds fall well short of quantity multiplied by the starting price.
The effect grows with position size. A holding large enough to matter cannot be sold at anything close to the quoted price, and everyone in the market knows it.
A small amount of buying moves the whole figure
Because the price applies to all supply, purchasing a modest quantity at a higher price revalues everything that did not trade.
An asset with little available supply can therefore gain an enormous headline valuation on relatively little capital committed.
This works identically in reverse, which is why capitalisation figures fall by large amounts on days when trading volume was unremarkable.
Locked supply distorts the comparison further
Tokens sitting in vesting contracts, treasuries or long-term staking positions are counted in the multiplication but cannot be sold today.
Where a large share of supply is unavailable, the price is being set by whatever fraction actually trades, and the capitalisation describes a market that does not exist yet.
What the number is still useful for
As a relative measure it works reasonably. Comparing two assets on the same basis gives a rough sense of scale that price alone does not.
It also becomes more meaningful alongside realised valuations, which price each unit at the level it last moved on chain rather than at today's quote.
What it cannot support is the inference that a given sum could be extracted, which is the reading that headlines about value created or destroyed usually imply.