What is Circulating Supply? | CryptoWallet.com

What is Circulating Supply?

Circulating supply refers to the total estimated number of tokens/coins actively being traded and available to be traded in the crypto markets. The circulating supply of a cryptocurrency does not include burned coins or accidental tokens sent to addresses with no owner or irrecoverable coins due to lost wallet access information.

Circulating Supply Explanation

The supply of a crypto asset may increase or decrease depending on several factors. For example, a cryptocurrency supply over time is expected to increase as each block is being validated on the blockchain network and new coins are mined. However, deliberate efforts can be made to decrease the supply, as with coin burn events aimed at permanently removing coins from the markets.

Although the circulating supply is crucial to calculating the market capitalization of a cryptocurrency asset, the actual current supply figures reported on many exchanges are simply an approximation of the total circulating supply breakdown. The cryptocurrency industry typically ranks assets by market cap, which is simply a product of the circulating supply and the current price of a single unit of the coin.

What About Max Supply?

This refers to the total number of mineable coins or the maximum token supply that will ever exist in the lifetime of a cryptocurrency, i.e. the asset’s entire all-time supply. Typically immutable, the maximum supply is set at a particular number according to the limits defined in its underlying protocol.