The total supply of a cryptocurrency represents all existing tokens and coins which currently exist as active digital assets. The total supply includes all tokens which exist because they have been created yet their distribution status remains uncertain since some tokens exist in the market while others remain secured through smart contracts or held by the project team or designated for future distribution. The total supply excludes tokens which have not yet been created or minted into existence.
The crypto projects establish total supply as their supply limit through the project whitepaper and technical documents. The total supply of some cryptocurrencies remains constant because it becomes fixed at their initial launch. The total supply of certain cryptocurrencies increases as time passes because their systems permit mining operations and staking rewards and token emissions to occur. The total supply of a cryptocurrency project will decrease when its tokens undergo permanent removal from the market through the process of token burning.
Total supply and circulating supply exist as distinct measurements. The circulating supply of a cryptocurrency only includes those tokens which traders can currently buy and sell in the market. The total supply of a cryptocurrency includes all available tokens together with those tokens which exist under locked or vested or other restricted formats. The difference between these two elements creates a major impact on both token economics assessment and market evaluation of a project.
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Investors use total supply as their primary method to assess a cryptocurrency’s value. Market capitalization which serves as a common method for project comparison depends on both total supply and price. The total supply of a project does not determine its valuation because total supply provides essential information about market scarcity and future asset distribution.
Total supply becomes an essential element in crypto news and analysis because it appears during discussions of token launches and emissions schedules and upcoming unlock events. The total supply of a currency helps readers understand price changes because it shows how token distribution changes will impact market conditions throughout time.