The term is often heard in the context of cryptocurrencies and other financial markets. But what is circulating supply and how is it calculated for each cryptocurrency?
What is Circulating Supply?
In the context of cryptocurrencies, the circulating supply is the number of coins or tokens that are circulating in the cryptocurrency market and thus accessible to the public.
How is the Circulating Supply determined?
Over time, the circulating amount of coins for a certain cryptocurrency can increase or decrease.
For example, when talking about Bitcoin, the circulating supply is bound to increase until all 21 million coins are mined and in circulation. This gradual increase of coins is programmed into the Bitcoin network by design, allowing new coins to be created every 10 minutes until the total supply is mined.
On the contrary, cryptocurrencies also implement planned reductions in their circulating supply, to hopefully increase the value and scarcity of their coins or tokens. This is done through what is more commonly known as a coin burn, a process that permanently removes coins from the market at specific timeframes.
One of the most popular examples of this reduction method is BNB, the native cryptocurrency of Binance. The company “burns” a set amount of coins every quarter until they have burned a total of 100.000.000 coins, reducing their total supply in half.
What is the difference between circulating supply and total supply?
The total supply of a cryptocurrency is not the same as the circulating supply. The main difference between the two is that:
- The circulating supply refers to the coins/tokens that are publicly available and trading in the market
- The total supply refers to the total amount of coins/tokens in existence. The total supply can also increase or decrease, depending on several factors.
- Ethereum is a good example of a gradually increasing total supply. The cryptocurrency’s total supply is circulating the market and increasing over time, a practice that causes concerns for inflation. This has led to the suggestion of a fixed supply that could be implemented in the foreseeable future.
- On the contrary, the total supply of coins can also decrease, as is the case with coin burns.
Additionally, one can calculate the total market capitalization of a coin by multiplying a coin’s market price with the number of circulating coins.
For example, if a certain cryptocurrency is traded at $2.00 each, and has a circulating supply of 1 million coins, the total market cap would equal $2 million.
FAQs
In the context of cryptocurrencies, the circulating supply is the number of coins or tokens that are circulating in the cryptocurrency market and thus accessible to the public. The term is often heard in the context of cryptocurrencies and other financial markets.
How is circulating supply calculated? ›
Another way to determine the circulating supply is by dividing a cryptocurrency's market capitalization by its price. The circulating supply formula for this method is as follows: Circulating Supply = Market Cap/Price.
What is the meaning of circulating supply? ›
Circulating Supply is the total number of coins or tokens that are actively available for trade and are being used in the market and in general public. When a company creates a particular number of tokens, only a portion of it instead of the whole supply is made available for circulation.
What does 100% circulating supply mean? ›
The circulating supply refers to the coins that are accessible to the public and should not be confused with the total supply or max supply. The total supply is used to quantify the number of coins in existence, i.e., the number of coins that were already issued minus the coins that were burned.
How do you calculate circulating supply token? ›
B. How is Circulating Supply Calculated?
- Start with the total supply of the cryptocurrency.
- Deduct any tokens held by the project team, developers, or locked in smart contracts.
- Exclude tokens that are reserved for specific purposes, such as ecosystem development, partnerships, or future use.
If the circulating supply is equal to the maximum supply, this means that the entire quantity of cryptocurrencies has been released. The price of the relevant cryptocurrency may gain or lose value depending on market conditions. As an example, the circulating supply and maximum supply of Litecoin (LTC) is 84 million.
Is a high circulating supply good or bad? ›
Circulating supply helps in assessing the liquidity of a cryptocurrency. A higher circulating supply often means better liquidity, making it easier to buy or sell without affecting the price too much.
What does a low circulating supply mean in crypto? ›
Cryptocurrencies with a low circulating supply are those with a limited number of coins.
What happens to a cryptocurrency when it runs out of its circulating supply? ›
After a token reaches maximum supply, the argument goes, the coin's supply becomes static - miners can no longer create new coins. The demand should continue to grow. A maximum cap, they hope, guarantees value gains.
Does circulating supply affect crypto prices? ›
The total supply of a cryptocurrency is a key factor – along with circulating supply – that affects its market value. Crypto supply is an important concept for anyone looking to use or invest in a coin or token to understand.
In the dynamic landscape of cryptocurrency, these ten coins, including TRON, Shiba Inu, Astar, Kaspa, Dogecoin, Stellar, Kava, Polygon, Cronos, and VeChain, present diverse potentials for reaching the $1 milestone in 2024. Investors keen on penny cryptos have a spectrum of options to explore.
What is the difference between circulating supply and total supply of cryptocurrency? ›
Total supply refers to the total number of cryptocurrency coins or tokens created. It differs from circulating supply, as it includes coins or tokens that are locked or held in reserve, and maximum supply, which is the total number that can ever be created.
What year will the last Bitcoin be mined? ›
It's estimated that all bitcoins will be mined by the year 2140, at which point the last block reward will be released. If a Bitcoin is lost or destroyed, it cannot be recovered, which can decrease the total supply of Bitcoins and increase their overall value.
How circulating supply is calculated? ›
The calculation involves taking the initial supply of coins or tokens that were created at launch and subtracting any coins that were subsequently burned; any portion of the supply that may be locked away for a certain period, and any reserves held for development, future release, or other purposes.
How much is the circulating supply of Bitcoin? ›
How Many Bitcoins Are There Now in Circulation?
| Total BTC in Existence | 19,776,187.5 |
|---|
| Bitcoins Left to Be Mined | 1,223,812.5 |
| % of Bitcoins Issued | 94.172% |
| New Bitcoins per Day | 900 |
| Mined Bitcoin Blocks | 854,190 |
LINK has a circulating supply of 608.10M coins and a max supply of 1.00B LINK.
How do you calculate circulating volume? ›
Introduction
- Men: Blood Volume = (0.3669 × H3) + (0.03219 × W) + 0.6041.
- Women: Blood Volume = (0.3561 × H3) + (0.03308 × W) +0.1833.
The circulating current is the time integral of the difference of the CM voltages divided by the inductance value. So the circulating current depends on the inductance value, switching frequency and the CM voltage.
What is the circulating supply ratio? ›
Circulating Supply is the current number of coins in circulation on the blockchain. For Bitcoin, the circulating supply will be 19 million and for Ethereum, 121 million. Circulating Supply is always a percentage of the total supply. The higher the percentage, the better.
What is the formula for circulating current? ›
Conceptually, it really is as simple as Ohm's Law: I = V/R. Of course that is an over simplification, but it is the same concept applied to three phase AC systems.
