Circulating Supply

Bydpalumbos13

Circulating Supply: Tokens Available for Trading

Circulating supply represents the number of cryptocurrency tokens currently available for public trading and use. It's like counting how much money is actually in circulation versus locked away.

Circulating supply refers to the number of cryptocurrency tokens that are publicly available and actively trading in the market. This excludes tokens that are locked, vested, burned, or held by the project team and not yet released.

How Circulating Supply Works

Market availability determines which tokens can actually be bought, sold, or used, affecting real supply and demand dynamics.

Exclusion criteria remove locked tokens, team allocations with vesting periods, and tokens held in project treasuries from circulation counts.

Dynamic changes occur as new tokens are minted, existing tokens are burned, or locked tokens become available through vesting schedules.

[IMAGE: Circulating supply breakdown showing available tokens vs locked, vested, and burned tokens]

Real-World Examples

  • Bitcoin circulating supply increases gradually through mining until the 21 million cap is reached
  • Ethereum circulating supply changes through staking, burning, and issuance mechanisms
  • Project tokens often have low initial circulating supply that increases as team and investor allocations vest

Why Beginners Should Care

Market cap calculations use circulating supply rather than total supply to determine more accurate market valuations.

Price impact from supply changes when large amounts of locked tokens become available for trading.

Investment timing considerations around major supply increases that could create selling pressure.

Related Terms: Total Supply, Token Supply, Market Cap, Vesting Schedule

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