Circulating supply refers to the number of coins or tokens of a specific cryptocurrency available for trading and financial transactions.
Circulation supply refers to the total number of units of a particular cryptocurrency in circulation at any given time. This is an important metric to consider when evaluating the potential value, price, and stability of a cryptocurrency.
The circulating supply of a cryptocurrency differs from its total supply, which is the total number of units that will ever be created. Some cryptocurrencies -like Bitcoin- have a limited total supply, while others -such as Ethereum- have no fixed maximum supply. The circulating supply of a cryptocurrency can change over time as new units are mined or released into circulation or as existing units are held or sold. The total circulation supply of a cryptocurrency is impacted by the rate at which new units are released into circulation, also known as the inflation rate.
Another impacting factor is the behavior of its holders. For example, if many holders decide to sell their crypto units simultaneously, the circulating supply can increase and lead to a decrease in the currency's price. On the contrary, holding on to the units can reduce the circulation supply and increase the price.
It is important to note that the circulating supply of a cryptocurrency can be difficult to determine accurately, as it can vary depending on a number of factors, including the activity of holders, the availability of units on exchanges, and the accuracy of data sources.