What the multiplication assumes
That the price of the last small trade applies to the entire supply. For a liquid asset the error is modest; for a thin one it is enormous, because selling even a fraction of the supply would move the price dramatically.
This is why a token can have a large headline capitalisation and almost no depth. The two numbers are unrelated.
Circulating versus total versus fully diluted
Circulating supply excludes locked, vested and unissued tokens. Total supply counts everything issued. Fully diluted valuation uses maximum supply, which includes tokens that do not yet exist.
A low circulating supply with a large future unlock schedule means the current capitalisation understates future dilution, and that schedule is public information worth reading.
Why rankings mislead
Two assets with the same capitalisation can differ by orders of magnitude in liquidity, holder distribution and how much of the supply is genuinely tradeable. Ranking by capitalisation treats them as comparable.
A better quick comparison is depth at your size, plus the unlock schedule.
Burned supply complicates it further. Tokens sent to an unspendable address are gone in practice but may still be counted depending on the methodology, which is one reason the same asset can rank differently on two sites without either of them making an error.
Using it for what it is good at
Rough scale comparison between established assets, and tracking how an asset's relative position changes over time. Not for estimating how much could be realised, and not for judging whether something is cheap.
FBT Swap shows market data with its source and never presents a valuation as a judgement about value.