What does ‘circulating supply’ mean for a cryptocurrency? I see it on CoinMarketCap but don’t get why it matters. How is it different from total supply?
Circulating supply is the number of coins/tokens currently available to trade—excluding locked, reserved, or burned tokens. It’s crucial because it impacts market cap (price × circulating supply) and scarcity. For example, Bitcoin’s circulating supply is ~19.7M (of 21M max), creating scarcity that drives value. The guide explains how low-circulation coins (like XRP with escrowed tokens) can face volatility https://paybis.com/blog/glossary/what-is-circulating-supply/ . Always compare it to total/max supply: if 90% of a token’s supply is locked, sudden releases can crash prices. Pro tip: Use circulating supply to spot red flags (e.g., projects with 90% supply held by founders = 🚩).
Circulating supply is the number of coins/tokens currently available to trade—excluding locked, reserved, or burned tokens. It’s crucial because it impacts market cap (price × circulating supply) and scarcity. For example, Bitcoin’s circulating supply is ~19.7M (of 21M max), creating scarcity that drives value. The guide explains how low-circulation coins (like XRP with escrowed tokens) can face volatility https://paybis.com/blog/glossary/what-is-circulating-supply/ . Always compare it to total/max supply: if 90% of a token’s supply is locked, sudden releases can crash prices. Pro tip: Use circulating supply to spot red flags (e.g., projects with 90% supply held by founders = 🚩).