The term “circulating supply” denotes the quantity of cryptocurrency coins or tokens currently circulating and accessible to the general public in the market.
The number of coins in circulation for a cryptocurrency may rise or fall as time progresses. Take Bitcoin as an instance, where its circulating supply will continue to rise incrementally until it hits the ceiling of 21 million coins. This incremental rise is tied to the mining activity that produces fresh coins approximately every 10 minutes. On the other hand, events such as coin burns, like those conducted by Binance, reduce the circulating supply by irrevocably taking coins out of circulation.
The circulating supply denotes the coins available for public use and must not be mistaken for the total or max supply. The total supply measures the quantity of coins currently in existence, which is the total number of coins issued minus coins burned. The total supply is the circulating supply plus coins locked in escrow. Conversely, the maximum supply represents the upper limit of coins that will ever exist, encompassing both the current and those that will be mined or available later.
Additionally, the market capitalization of a cryptocurrency is determined by multiplying its current market price by its circulating supply. For instance, if there are 10,000,000 coins of a particular cryptocurrency in circulation and they are currently trading for $5.00 per coin, the market capitalization would be $50,000,000.
