🔐 What is the meaning of this term? How does it affect digital currency?
📚Definition:
Circulating supply is the total number of tokens of a particular cryptocurrency available in the market. The supply in circulation includes all tokens locked in decentralized applications and held on cryptocurrency exchanges or in user wallets. Circulating supply is different from total supply, which is the total amount of tokens that will be generated for a coin.
Why is circulating supply used to determine market value instead of total supply?
Circulating supply is the number of currencies currently available for trading. Total Supply is the number of cryptocurrencies that are currently on cryptocurrency markets but are not necessarily in circulation, not including cryptocurrencies that may be closed or otherwise inaccessible to the public.
How does circulating supply affect digital currency?
The circulating supply in a cryptocurrency can give you an idea of how rare a particular asset is.
The rarer the asset, the higher its price is likely to be. Ethereum, for example, has a circulating supply of over 100 million ETH, making it much less scarce than Bitcoin.
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