What is Circulating Supply?
Crypto Glossary Definition
The number of coins or tokens that are circulating in the market and in the hands of the general public.
Why Circulating Supply Matters
Circulating supply is the number of coins actually available and tradable in the market right now, as opposed to total or max supply, which may include locked, unmined, or unreleased tokens. It's the figure actually used to calculate a coin's market cap.
Circulating Supply in Practice
An investor comparing two similarly priced tokens is surprised to see one has a market cap several times larger than the other, despite both trading at roughly the same price per coin. Digging into each project's tokenomics page, they discover the explanation: the smaller-market-cap token has a circulating supply of only 10 million coins actually available to the public, while the larger one has over 900 million coins already in circulation, even though both have a similar total supply cap written into their protocols. Market cap is calculated using circulating supply rather than total or max supply precisely because it's meant to reflect the value of coins actually tradable right now - tokens still locked in a team vesting contract, or coins that haven't been mined yet, aren't really competing for buyers in the current market. The investor also notices that one token's circulating supply is set to increase substantially over the next year as a large early-investor unlock vests, meaning a wave of new sell-side supply could hit the market regardless of demand, potentially pressuring the price downward even if nothing else about the project changes. This is why experienced investors check unlock schedules alongside circulating supply figures, since a low circulating supply today doesn't mean it will stay low tomorrow.
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