Circulating supply refers to the total number of coins or tokens of a cryptocurrency that are currently available for trading in the market. This metric includes all tokens that are actively accessible to users and excludes those that are locked, reserved, or not yet mined.This figure is significant because it helps determine a cryptocurrency’s market capitalization, which is calculated by multiplying the circulating supply by the current price per coin. Understanding circulating supply is crucial for analyzing the potential value and scarcity of a cryptocurrency.When a project releases additional tokens, like during a token sale, it can impact the circulating supply and therefore influence price dynamics. Conversely, tokens held in reserve or those that are lost over time also affect the overall availability in the market.Investors often look at circulating supply along with the total supply to gauge a cryptocurrency’s inflation potential and long-term viability. An increasing circulating supply can lead to dilution, while a limited supply can enhance perceived value.