Understanding Crypto Coin Supplies

May 9, 2024

In the world of cryptocurrencies, the term “token supply” refers to how many coins will exist at any given time. This can be the circulating supply, the maximum supply, or the total supply. 

These supplies often impact how volatile a crypto is. Understanding your crypto supply is important, especially if you are a crypto investor. Even as a crypto gambler, changes in market prices can affect your casino account balance.

Luckily, some crypto online and social casinos allow you to play with more stablecoins. For example, some sweepstakes casinos support Tether and DAI transactions. With such cryptocurrencies, you can play sweepstakes casino games without worrying of about market volatility.

Still, if you decide to use BTC, it is important to stay up to date with news or events that can affect your crypto supply. For example Bitcoin halving is one of the major events that usually affect the supply for Bitcoin.

Learning about these supplies helps you understand how valuable a crypto coin might be. The supplies impact the price and other important factors. Let’s look at each supply more closely.

Circulating Supply

The circulating supply counts all the coins currently owned by people and on crypto exchanges to trade. This number is used to calculate the market cap of a crypto coin.

Market cap tells you how big and important a crypto project is. It is calculated by taking the price of one coin and multiplying it by the circulating supply. For example, if a coin costs $1 each, and there are 10 million coins in circulating supply, the market cap is $10 million.

The circulating supply can change over time as new coins are created or old ones are destroyed. But it only looks at the coins available right now, not any locked away.

Maximum Supply

The maximum supply is the highest number of coins that will ever be created on that crypto network. Many projects have a capped supply.

Bitcoin has a maximum supply of 21 million coins. No more than that can ever be made, no matter what. Other projects allow more coins to be created over time.

When a crypto hits its maximum supply, that means no brand new coins can ever be made again. This makes the coin scarcer over time. As supply gets lower, the price could go up if demand is still high.

The maximum supply is set by the creators of the coin when they first launch the project.

Total Supply

The total supply adds the circulating supply and any other coins that have been created but not released yet. These are often kept in special wallets or smart contracts.

For example, some coins are kept locked away to pay future rewards for validating transactions. Others are saved by the creators to fund project development.

The total and circulating supplies are not always the same. The circulating supply only counts coins currently available to trade. The total is higher since it includes those locked away coins too.

The total supply can increase over time on some crypto projects. The creators may make more coins down the road. But for cryptos like Bitcoin, the total supply is fixed forever based on the maximum supply.

Putting It All Together

Circulating supply – Coins currently able to trade Maximum supply – Highest number of coins that will ever exist Total supply – Circulating supply plus any locked away coins

These supplies are very important for understanding a crypto coin’s value and how that could change going forward. Investors study them closely before buying.

Circulating supply shows how many coins currently exist to determine market cap and liquidity. Maximum supply indicates the hard scarcity cap. And total supply hints at potential for future growth versus supply crunches.

The limited, controlled supplies of crypto are very different from traditional physical money that governments can just print more of whenever they want.

Conclusion

In summary, the different cryptocurrency token supplies – circulating, maximum, and total – play vital roles in establishing value. Circulating supply shows market cap and liquidity now. Maximum supply sets ultimate scarcity. Total supply hints at growth potential versus inflationary/deflationary pressures.

Be sure to research these metrics for any cryptocurrency before investing, as they significantly impact pricing based on supply and demand dynamics. The limited, predictable supplies of many cryptocurrencies differentiate them from fiat money that central banks can print unchecked.

 



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