What Is Circulating Supply?

Circulating supply, a key metric, indicates the number of cryptocurrency units actively traded, impacting market capitalization, liquidity, and scarcity.

Oct 28, 2024 at 12:11 am

What is Circulating Supply?

1. Definition

Circulating supply refers to the number of units of a cryptocurrency that are currently in active circulation. It excludes tokens that have been lost, destroyed, reserved for future issuance or are held by long-term investors.

2. Importance

Circulating supply is a key metric for:

• Market capitalization: The total value of a cryptocurrency is calculated by multiplying the circulating supply by the current price.
• Trading volume: High circulating supply generally means greater liquidity and a more actively traded asset.
• Scarcity: A lower circulating supply can indicate scarcity and potentially higher demand, leading to price appreciation.

3. Factors Affecting Circulating Supply

• Issuance: New tokens can be issued, increasing the circulating supply.
• Burning: Existing tokens can be permanently removed from circulation, decreasing the supply.
• Staking: Tokens held in a staking mechanism may be temporarily removed from circulation, but still counted towards the total supply.
• Lost or destroyed tokens: Tokens can be lost or destroyed, permanently reducing the circulating supply.

4. How to Find Circulating Supply

Circulating supply data can be found on:

• Exchange market data: Top cryptocurrency exchanges like OKX, Binance, Coinbase, and Kraken provide real-time circulating supply information.
• Third-party websites: Websites like CoinMarketCap and CoinGecko aggregate circulating supply data from multiple sources.
• Directly from the project: Cryptocurrency projects often release their own circulating supply data on their websites or through official announcements.

5. Examples

• Bitcoin (BTC): Circulating supply ~ 19.24 million BTC
• Ethereum (ETH): Circulating supply ~ 118.52 million ETH
• Binance Coin (BNB): Circulating supply ~ 166.55 million BNB