Glossary
What is circulating supply?
In one sentence
Circulating supply is the number of units currently available to trade — as distinct from the total that exists or will exist.
Three supply figures matter and are routinely confused. Circulating supply is what is liquid and tradeable now. Total supply is what exists, including locked or reserved tokens. Maximum supply is the ceiling the protocol allows, where one exists.
The gaps between them are where dilution hides. A project whose circulating supply is 10% of its total has 90% still to arrive, typically on a vesting schedule for the team and early investors. Those unlocks are sell pressure with a known date, and they routinely coincide with sharp falls.
Before buying any token, it is worth finding the unlock schedule. A coin that looks reasonably valued on circulating supply can look very different on fully diluted terms.
For example
Bitcoin's maximum supply is 21 million; the circulating figure is lower and grows slowly with each block.