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What Is Circulating Supply in Cryptocurrency?
- Circulating supply in cryptocurrency represents the number of coins or tokens available for public use, excluding locked, reserved, or burned tokens.
- This metric is crucial for understanding market cap, spotting overpriced tokens, and making informed investment decisions.
- Circulating supply is calculated by subtracting locked tokens and burned coins from the total supply.
- It helps investors gauge how much of a token is actively trading on the market vs. held elsewhere.
- Centralized projects often have controlled token distributions, while decentralized projects follow rules set in the code.
- Factors like mining rewards, token unlocks, and token burns can affect circulating supply.
- Market capitalization is calculated by multiplying a coin's price by its circulating supply.
- Understanding supply metrics can prevent surprises like sudden price drops or dilution of value.
- Checking circulating supply vs. total supply vs. maximum supply helps assess a coin's economy and valuation.
- Circulating supply data is tracked using blockchain explorers, project disclosures, and analytics platforms like CoinGecko and CoinMarketCap.
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