📌 What Is Circulating Supply?
Circulating supply is the number of cryptocurrency coins or tokens that are currently available to the public and actively trading in the market. It is a key metric used to calculate market capitalization and assess the liquidity and scarcity of a digital asset.
Circulating supply excludes coins that are locked, reserved, staked, burned, or otherwise not freely tradeable. Understanding circulating supply is essential for evaluating a project's valuation, growth potential, and long-term tokenomics.
This glossary covers all the essential supply-related terms every crypto investor should know.
📌 Why Circulating Supply Matters
Circulating supply directly impacts market cap, price discovery, and dilution risk. A low circulating supply with high demand can drive prices up, while a large supply with low demand can suppress prices.
📚 Complete Circulating Supply Glossary
Circulating Supply
The number of coins that are currently available to the public and trading in the market. Excludes locked, reserved, staked, or burned tokens. Used to calculate market cap.
Example: Bitcoin's circulating supply is around 19.5 million BTC (as of 2025).
Total Supply
The total number of coins that have been created, including those that are locked, staked, reserved, or not yet in circulation. Total supply ≥ circulating supply.
Example: Ethereum's total supply includes all ETH ever minted, including locked staking deposits.
Max Supply
The maximum number of coins that will ever exist for a cryptocurrency. This is hard-coded in the protocol for many assets (e.g., Bitcoin's 21 million).
Example: Bitcoin has a max supply of 21 million BTC.
Token Burn
The permanent removal of tokens from circulation by sending them to an address from which they cannot be spent. Reduces circulating supply and can increase scarcity.
Example: BNB burns a portion of its supply regularly, making it deflationary.
Vesting
A process where tokens are locked and released gradually over a period, typically for team members, advisors, or investors. Aligns long-term incentives and prevents immediate large sell-offs.
Example: Project founders often have a 4-year vesting schedule with a one-year cliff.
Cliff (Vesting)
A period at the beginning of a vesting schedule during which no tokens are released. After the cliff, tokens are released gradually.
Example: A 1-year cliff means no tokens are released until after 1 year.
Locked Supply
Tokens that are restricted from trading due to smart contract locks, vesting schedules, or governance decisions. Not part of circulating supply.
Example: Staked tokens are often locked and not included in circulating supply.
Staked Supply
Tokens that are locked in staking contracts to secure the network or earn rewards. These are typically excluded from circulating supply.
Example: A significant portion of ETH is staked and not in circulating supply.
Fully Diluted Market Cap (FDMC)
The market cap if all tokens (max supply) were in circulation. Calculated as current price × max supply. Provides a long-term valuation perspective.
Example: BTC's FDMC is price × 21 million.
Dilution
The reduction in existing shareholders' ownership percentage due to the issuance of new tokens. Can occur when tokens are minted or unlocked from vesting.
Example: If a project mints new tokens, the value of existing tokens may be diluted.
Inflation
The rate at which new tokens are added to the circulating supply, expressed as a percentage. Higher inflation can dilute token value.
Example: Ethereum's current inflation rate is around 0.5% per year (post-merge).
Deflation
A situation where the circulating supply decreases over time due to mechanisms like token burning. Can increase scarcity and value.
Example: BNB is deflationary due to its quarterly token burns.
Token Minting
The process of creating new tokens, which increases total supply and may increase circulating supply if they become available to the public.
Example: New ETH is minted as block rewards for validators.
Reserve Supply
Tokens that are held in reserve by the project or foundation, often for future development, partnerships, or ecosystem funding.
Example: Many projects reserve a portion of tokens for the treasury.
Treasury Supply
Tokens owned by the project's treasury, used for operational expenses, grants, or community incentives. May or may not be part of circulating supply.
Example: DAO treasuries hold tokens that are not in public circulation.
Emission Schedule
A predetermined schedule for releasing new tokens into circulation, often used in proof-of-stake or mining networks.
Example: Bitcoin's halving schedule is an emission schedule.
Halving
A periodic event in Bitcoin and other proof-of-work networks where block rewards are cut in half, reducing the rate of new token emission.
Example: The Bitcoin halving occurs approximately every 4 years.
Supply Shock
A sudden change in circulating supply (e.g., a large token burn or a significant unlock) that can cause rapid price movements.
Example: A large burn event can create a supply shock and drive prices up.
Genesis Block
The first block of a blockchain, which often contains the initial token distribution. The supply from the genesis block sets the starting point for circulating supply.
Example: Bitcoin's genesis block mined 50 BTC in 2009.
Supply Metrics Comparison
| Metric | Definition | Use Case | Example (BTC) |
|---|---|---|---|
| Circulating Supply | Tokens available to the public | Market cap calculation | ~19.5M BTC |
| Total Supply | All tokens ever created | Assess total creation | ~19.6M BTC |
| Max Supply | Absolute maximum ever | Long-term valuation | 21M BTC |
| Locked Supply | Tokens not freely tradeable | Assess liquidity risk | Staked/vested tokens |
💡 Pro Tip
Always check both circulating and total supply when evaluating a project. A low circulating supply with a high total supply may indicate future dilution risk when locked tokens are released.