Friday, March 29, 2024

Circulation

by Hideo Nakamura
Circulation

Circulation is a term used to describe the movement of cryptocurrencies around different wallets, exchanges, and other accounts. It refers to how many coins are in circulation at any given time and can affect the price of certain currencies.

The total number of coins in circulation for a particular cryptocurrency will depend on its specific supply rules or inflation rate. For example, Bitcoin has an upper limit cap set at 21 million coins meaning that once all those have been mined no more new bitcoins will be created; however some altcoins like Ethereum have unlimited supplies which means their circulating supply could theoretically increase indefinitely over time.

When it comes to trading cryptos, most investors focus on two key metrics: market capitalization (the current value of all coins in existence) and volume (the amount traded each day). The higher these numbers are, the more liquid the coin is considered since there’s plenty available for buyers/sellers to move back-and-forth without impacting prices too much.

Circulating Supply also impacts price movements because if a currency has low liquidity then small buy/sell orders can cause large swings due to limited buying power from traders who only want small amounts compared with those seeking larger quantities.. Additionally when looking up information about certain crypto assets you might also come across something called “maximum supply” – this simply represents how many units there could ever possibly exist based off predetermined rules such as issuance schedule or hard caps etc., so it may not necessarily match what’s actually circulated right now but should give an indication as far potential future growth prospects go depending upon demand levels going forward into perpetuity

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