Circulating Supply

Circulating supply refers to the total number of cryptocurrency coins or tokens that are currently available and actively trading in the market. It excludes any locked, staked, or reserved tokens that are not accessible to the public. This metric plays a crucial role in determining a cryptocurrency’s market capitalization and price dynamics.

How Circulating Supply Affects Value

The circulating supply, when multiplied by the current price of a cryptocurrency, gives the market cap—a key measure of a crypto asset’s size. A lower supply can create scarcity, potentially increasing the value if demand rises, while a larger supply might put downward pressure on price unless matched by strong demand.

Why Circulating Supply Matters

Investors use circulating supply to compare projects, assess potential for growth, and evaluate how inflation or token release schedules might affect prices. It also helps prevent misleading evaluations that might occur if the total supply is used instead.

A Key Indicator in Crypto Analysis

Circulating supply is a foundational metric for traders, investors, and analysts looking to understand a project’s economics and market behavior. Knowing how much of a token is actively in use can provide valuable insights into both its current standing and future potential.