Circulating Supply

Circulating supply refers to the total number of coins or tokens of a specific cryptocurrency that is publicly available and actively circulating in the open market. It includes the portion of the total supply that is not locked, reserved, or held by the project team or other entities. In other words, circulating supply represents the tokens that can be bought, sold, and traded among users.

Key points about circulating supply include:

1. Market Availability: The circulating supply is the quantity of tokens that is available for trading on various cryptocurrency exchanges. Users can buy, sell, and exchange these tokens in the open market.

2. Excludes Locked or Reserved Tokens: Circulating supply does not include tokens that are locked, reserved for development, held by the project team, or allocated for specific purposes. It focuses on the tokens that are freely tradable.

3. Market Capitalization Calculation: Circulating supply is a crucial factor in calculating the market capitalization of a cryptocurrency. Market cap is determined by multiplying the current market price per token by the circulating supply.

4. Impact on Price: The circulating supply can influence the price dynamics of a cryptocurrency. A higher circulating supply, all else being equal, might lead to lower token prices, as the market is potentially more saturated.

5. Token Metrics: When evaluating a cryptocurrency, investors often consider circulating supply along with other metrics such as total supply, maximum supply, and inflation rate. These metrics collectively provide insights into the token's scarcity, potential for price appreciation, and long-term sustainability.

It's important to note that circulating supply can change over time due to factors such as token burns, token unlocks, or additional token issuance. As such, investors and analysts closely monitor circulating supply when assessing the overall health and dynamics of a cryptocurrency.