Circulating supply
Circulating supply is the estimated number of coins and tokens that are publicly available in the crypto market. It’s also called the circulating amount.
What is circulating supply?
Not all existing coins or tokens count as circulating. For example, some tokens are locked and not yet available. Circulating supply also doesn’t mean that all the tokens are immediately available for sale or actively traded.
It differs from total supply, which is generally the number of existing tokens, including locked tokens. Max supply is the potential upper limit on the number of tokens that can ever exist. Not every cryptocurrency has a fixed limit like this.
Circulating supply is an estimate. For example, data providers may treat reserves, staked coins, and team tokens differently.
An example of circulating supply
A project has issued 10 million tokens. Of those, 4 million are locked. Data providers might then count 6 million tokens as circulating supply.
If each token costs €2, the calculated market cap is €12 million: 6 million multiplied by €2. If 1 million locked tokens are released later, circulating supply increases to 7 million.
Why is circulating supply important in crypto?
Circulating supply matters for market cap, the total market value of a cryptocurrency. So a low price per token doesn’t automatically mean a cryptocurrency has a low market value.
The term often comes up in news about new issuance, token unlocks, and burns. New coins from mining or staking rewards can increase the supply. A token unlock can also increase the supply without creating any new tokens. A burn can reduce the supply.
The difference between circulating supply and max supply shows how many additional tokens may still become available. A larger circulating supply doesn’t automatically mean a lower price. The price also depends on demand and market conditions.
