What Is Circulating Supply and Why It Matters

Circulating Supply vs. Total Supply vs. Max Supply

These three terms are related but distinct, and they often cause confusion.

• Circulating supply is what is currently out in the market and available to trade.

• Total supply is all tokens that have been created so far, minus any that have been permanently burned (destroyed). This includes tokens that are locked or not yet released.

• Max supply is the hard cap on how many tokens will ever exist. Bitcoin, for example, has a max supply of 21 million. Some projects have no max supply at all.

Understanding the gap between these numbers tells you a lot about a project's tokenomics. A large difference between circulating and total supply could signal significant future selling pressure if locked tokens are released over time.

Reading Circulating Supply on CoinGecko: Bitcoin

Using Bitcoin as an example, its max supply is capped at 21 million BTC, hardcoded into its protocol since day one. Unlike many modern crypto projects, Bitcoin had no VC fundraising at launch, meaning there were no investor allocations or vesting schedules. As a result, its total supply and circulating supply are effectively the same figure. Circulating supply currently sits at approximately 20 million BTC, and will continue to increase gradually as new coins are issued through mining.

Why Circulating Supply Matters

The reason why circulating supply is often the key figure studied is because a project may for instance create 1 billion tokens at launch, but lock up 600 million tokens. These locked tokens may be reserved for the team, held in a treasury or subject to a vesting schedule. Only the remaining 400 million would count toward circulating supply.

Tokens with a low circulating supply relative to their max supply are often referred to as 'low float, high FDV' tokens. This structure is common in VC-backed projects where large portions of supply are locked under vesting schedules, and is worth noting as it can signal future selling pressure when those tokens unlock.

What Affects Circulating Supply?

Circulating supply isn't static. It changes based on a few key mechanisms:

• New issuance or mining: Proof-of-work coins like Bitcoin release new coins as block rewards, gradually increasing circulating supply until the max is reached.

• Vesting schedules: Team or investor tokens often unlock over months or years, increasing circulating supply incrementally.

• Token burns: Projects sometimes permanently remove tokens from circulation to reduce supply, which can have deflationary effects on price.

• Staking or locking: Tokens locked in staking protocols are sometimes excluded from circulating supply figures, depending on how a project defines it.

A Note on Data Accuracy

Circulating supply figures aren't always perfectly precise. Different data providers may use slightly different methodologies, for instance, whether to include tokens locked in smart contracts or held by dormant wallets. CoinGecko applies its own methodology to ensure consistency. If CoinGecko cannot verify the accuracy of such information, the Circulating Supply will be marked with a “-” symbol.