How does the concept of circulating supply differ from total supply in the world of digital currencies?

3 answers

• Nov 27, 2021 · 3 years ago
  Circulating supply refers to the total number of coins or tokens that are currently available and in circulation in the market. It represents the portion of the total supply that is actively being traded or used by the public. On the other hand, total supply refers to the maximum number of coins or tokens that will ever exist for a particular cryptocurrency. This includes both the coins in circulation and those that are yet to be released. The difference between circulating supply and total supply is important because it can impact the scarcity and perceived value of a cryptocurrency. A lower circulating supply, relative to the total supply, can create a sense of scarcity and potentially drive up the price of the cryptocurrency. Conversely, a higher circulating supply may indicate a larger supply of coins available for trading, which can influence the market dynamics and potentially lead to lower prices.
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• Nov 27, 2021 · 3 years ago
  Alright, let me break it down for you. Circulating supply is the number of coins or tokens that are currently out there in the market, available for trading. It's like the money you have in your wallet that you can spend. Total supply, on the other hand, includes all the coins or tokens that have been created or will be created in the future. It's like the total amount of money that will ever exist. The difference between circulating supply and total supply is important because it affects the value of a cryptocurrency. If the circulating supply is low compared to the total supply, it can create a sense of scarcity and drive up the price. On the flip side, if the circulating supply is high, it can indicate a larger supply of coins available for trading, which can put downward pressure on the price.
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• Nov 27, 2021 · 3 years ago
  In the world of digital currencies, circulating supply and total supply play a crucial role in determining the value and market dynamics of cryptocurrencies. Circulating supply refers to the number of coins or tokens that are currently in circulation and available for trading. It represents the actual supply that is actively being used by the public. Total supply, on the other hand, includes the circulating supply as well as any coins or tokens that have not yet been released. The difference between circulating supply and total supply is important because it can impact the perceived scarcity and value of a cryptocurrency. A lower circulating supply, relative to the total supply, can create a sense of scarcity and potentially drive up the price of the cryptocurrency. On the contrary, a higher circulating supply may indicate a larger supply of coins available for trading, which can influence the market dynamics and potentially lead to lower prices. At BYDFi, we closely monitor the circulating supply and total supply of digital currencies to better understand their market dynamics and make informed trading decisions.
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