Supply

Understanding a cryptocurrency’s supply - how many coins flow around an economy - is crucial to determine the coin’s market capitalization, demand and hence value. However, circulating supply is different from maximum and total supply.

Circulating supply (as the name suggests) defines how many units of the coin are circulating around the market at any given point. For example, bitcoin currently has ~19 million coins in circulation. Essentially, this number only includes coins which are on the blockchain and can be freely traded between wallets.

Total supply refers to the total number of coins that exist on the blockchain including ones that are not currently in circulation. When a crypto project launches a new coin, they usually create more coins than they initially distribute. However, total supply does not include coins which have been burned (or, in lack of a better term, lost).

Lastly, the maximum supply of a crypto refers to the maximum amount of coins that can ever be minted. For example, Bitcoin’s maximum supply is capped at 21 million. Once this cap is hit, no more bitcoins can be mined. Some coins like Ethereum, however, don’t have a maximum supply but they have a limit on the maximum amount of coins that can be mined in a day.

Native in crypto terms means the coin inherent to a blockchain. For example ETH is native to the Ethereum blockchain, which then is used to host many other currencies. Native Supply is the supply on a blockchain of the native coin.

High supply is generally considered bearish, insofar as more units on offer can depress prices whereas low supply is generally considered bullish, insofar as more units on offer can cause prices to rise.

The number of new units issued indicates the level of supply: a high value means a high supply and a low value means low supply. Rather than the number of units, this can also be expressed in terms of the dollar value. The number of units transacted in a period also indicates the level of supply: A high level showcases a high volume of activity and indirectly correlates to high supply from miner liquidation, while a low level showcases a low volume of activity and indirectly correlates to reduced supply from miner liquidation.