Token Circulation
Token circulation refers to the number of digital assets currently available and circulating in the public market and in the hands of the general public. It represents the portion of the total supply that is not locked, reserved, or held by the protocol founders or core development team.
This metric is crucial for determining the market capitalization of a cryptocurrency, as it serves as the multiplier for the current price. High circulation often indicates greater liquidity and broader distribution, while low circulation can imply higher price volatility due to potential supply shocks.
Understanding circulation is vital for investors to gauge the actual tradable supply versus the theoretical maximum supply. It directly impacts how market orders affect the price during trading sessions.