What is Total Supply?

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A total supply of a coin is the number of coins or tokens that currently exist and are either in circulation or locked away in a reserve. It is the sum of coins that have been mined excluding the total of coins that were burned or destroyed.

The total supply of a coin includes both the circulating supply and the coins that are yet to be distributed to the market. Such coins that are yet to be made available to the market include those that are being held under a lockup or reserve, which usually comes after a private sale or Initial Coin Offering (ICO) event.

Coins or tokens that are burned are excluded from the total supply of such coins. Hence, when a coin like the Binance coin undergoes its quarterly coin burn events, the total supply of BNB is reduced forever.

Total Supply vs. Circulating Supply

Unlike the total supply of a coin, the circulating supply of a coin is the sum of all coins that are already circulating and available for trading in the various cryptocurrency markets. The circulating supply of a coin is the number of coins that are already in the hands of the public and does not include coins or tokens that are locked up or being held in reserve.

When it comes to the market capitalization of a coin, the total supply of a coin isn’t so relevant. This is because the market prices of a cryptocurrency coin cannot be directly affected by the part of the supply that is locked or reserved, the calculation of market capitalization normally considers only the circulating supply instead of the total supply.

If you notice the circulating supply of a particular token has been consistently increased by the project developers over time, it’s assumed that the price of the token will increase in the future. On the other hand, if there’s too many tokens being released at once or too frequently, the value of the token may massively reduce.

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