By Bagar - 24.02.2020
Difference between circulating supply and total supply
Circulating Supply | Definition: The best approximate number of The total supply is basically the sum of the circulating supply and the coins that are locked up. Circulating Supply is the best approximation of the number of coins that are circulating in the market and in the general public's hands. Total Supply is the total.
Crypto Blog - News, updates and industry insights What is market cap in cryptocurrency? December 10, Market cap is a term often spoken in relation to cryptocurrency.
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Every asset has a market cap. One of the most popular crypto sites, CoinMarketCapeven ranks tokens by their market caps, so this is a definitely a piece of data you should be familiar with.VeChain Circulating Supply
How is it worked out? The market cap of a cryptocurrency is the price per token multiplied by the number of tokens in circulation circulating supply, not total supply.
For an example, the market cap of Bitcoin is calculated by multiplying the price, we let's say USD10, by the total amount of Difference between circulating supply and total supply in circulation, we will to bitcoin send and best app buy 17, Let's look at some popular coins as an example.
Compare Bitcoin and XRP, both in the top 3 cryptocurrencies by market cap. Bitcoin currently costs about USD3, What matters here is the relationship between price, supply and market cap. People are very often interested in investing in "low price" coins like XRP because they difference between circulating supply and total supply that the price will skyrocket into the thousands of dollars.
But when coins have a massive supply, like XRP does, it makes it difference between circulating supply and total supply unlikely, near impossible, for difference difference between circulating supply and total supply circulating supply and total supply price of XRP to reach into the hundreds or even thousands of dollars because of market cap.
It would be illogical to assume XRP could achieve such a massive market cap. Market cap can show potential growth Market cap can be used to shows the potential growth a token has, rather than the price.
How to use market cap, volume supply and circulating supply to analyze a cryptocurrency
But if the price is low and the market cap is low, then the token may have a lot of room for potential growth. Similarly, if the price is high and the market cap is low, the coin may still have the same potential for growth.
Token price is therefore more or less irrelevant because it is just a function of the supply.Cryptocurrency Market Cap Vs Circulating Supply? Dentacoin Supply Explained
You're investing based on how you think the price will perform, not because of the price per Market cap doesn't reflect true value Now we know what market cap is, but here's what it isn't: The market cap of a token does not represent the amount of money that is stored in that token.
The price is reflective of difference between circulating supply and total supply latest trades that have been made, not the amount of money that has difference between circulating supply and total supply put into the token.
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This is worth keeping in mind. Furthermore: You would never be able to sell all the tokens for the current market price.
Large buying sprees can shift the price up. Additionally, you should be aware that the circulating supply of a token can change.
Learn: Cryptocurrency Market Cap? The Ultimate Investor's Guide
When a circulating supply increases, the market cap will increase, even if the price stays the same. With coins that require mining, miners get a reward from mining which increases circulating supply. With other coins, the developers may have locked up a portion of the tokens for different reasons, such as marketing.
If there is a big source between the circulating supply and the total supply, you may want to find out why before investing.
Liquid does source endorse or adopt any such opinions, and we cannot guarantee any claims made in content written by guest authors.
This content is not financial advice and it is not a recommendation to buy or sell any cryptocurrency or engage in any trading or other activities. You must not rely on this content for any financial decisions.
Acquiring, trading, and otherwise transacting with cryptocurrency involves significant risks. We strongly advise our readers to conduct their own independent research before engaging in any such activities.
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