Circulating Supply
Circulating supply refers to the number of coins or tokens of a particular cryptocurrency that are currently in public circulation and available for trading in the open market. This figure excludes coins that are locked, reserved, burned, or otherwise not accessible to the general public, such as tokens held by the founding team under a vesting schedule, coins allocated to a foundation’s treasury, or tokens that have been permanently removed from circulation.
Circulating supply plays a central role in one of the most commonly referenced crypto metrics: market capitalization. Market cap is calculated by multiplying a cryptocurrency’s current price by its circulating supply, giving a rough estimate of the total value of all coins actively available in the market. This makes circulating supply an essential figure for accurately comparing the relative size of different cryptocurrency projects, since price alone can be a misleading indicator, a coin priced at a fraction of a cent could still have a massive market capitalization if its circulating supply numbers in the trillions.
It’s important to distinguish circulating supply from two related but distinct metrics: total supply and maximum supply. Total supply generally refers to all coins that have been created so far, including those that are locked or reserved but excluding any that have been permanently burned. Maximum supply, when applicable, refers to the absolute cap on how many coins will ever exist for a given cryptocurrency, as is famously the case with bitcoin’s 21 million coin limit. A cryptocurrency’s circulating supply is typically less than or equal to both of these figures.
For investors conducting due diligence, examining how a project’s circulating supply is expected to change over time is valuable. Projects with large amounts of tokens still locked up, scheduled to unlock and enter circulation gradually, can face downward price pressure as that new supply hits the market, a phenomenon sometimes referred to as token unlocks or supply dilution. Understanding a project’s full tokenomics, including how circulating supply will evolve, helps investors better anticipate potential future price dynamics beyond just current market conditions.