Circulating Supply
Circulating Supply Key Points
- Circulating supply refers to the number of coins or tokens currently available and accessible in the market.
- It is a key metric to determine the market capitalization of a cryptocurrency.
- Circulating supply differs from total supply as it excludes coins or tokens held by the project team or locked in smart contracts.
- A cryptocurrency’s price can be significantly affected by changes in its circulating supply.
Circulating Supply Definition
Circulating supply refers to the total number of a given cryptocurrency or token that is publicly available and circulating in the market. It is an important metric used to calculate the market capitalization of a cryptocurrency, which is determined by multiplying the circulating supply by the current price of each unit.
What is Circulating Supply?
Circulating supply is a measure of the quantity of certain cryptocurrency coins or tokens that are publicly accessible and currently active in the market.
This includes coins or tokens that have been mined or generated and are available for buying, selling, or trading.
The circulating supply does not include coins or tokens that have been destroyed, lost, or are not yet released.
Who Uses Circulating Supply?
Circulating supply is widely used by investors, traders, and analysts in the cryptocurrency market.
They use it to determine the market capitalization of a cryptocurrency, which is a key factor in making investment decisions.
Cryptocurrency exchanges and data aggregators also use the circulating supply to provide accurate information to their users.
When is Circulating Supply Relevant?
The circulating supply is relevant whenever there is a need to evaluate the value or worth of a particular cryptocurrency.
It is especially relevant when comparing different cryptocurrencies, as it helps to provide a more accurate reflection of the market value.
It is also relevant during the launch of a new coin or token, as it can indicate the initial market liquidity.
Where is Circulating Supply Used?
Circulating supply information is used in various cryptocurrency platforms and databases.
This includes cryptocurrency exchanges, market capitalization websites, and blockchain explorers.
It is also used in various financial models and algorithms that aim to predict price trends.
Why is Circulating Supply Important?
Circulating supply is important because it helps to determine the market capitalization of a cryptocurrency, which is a vital indicator of its value and potential for growth.
A lower circulating supply can lead to higher prices, while a higher circulating supply can lead to lower prices, all other things being equal.
It also provides insight into the liquidity and availability of a cryptocurrency in the market.
How is Circulating Supply Calculated?
Circulating supply is calculated by subtracting the number of coins or tokens that are not available for trading from the total supply.
This includes coins or tokens that have been burned, are held by the project team, or are locked in smart contracts.
The result is the number of coins or tokens that are freely circulating in the market and available for trading.