🧵TOKEN SUPPLY; What it means, categories and misconceptions.
Most people in crypto don’t actually understand Token Supply.
And that ignorance is costing them real money.
Let’s break down the 3 categories of token supply, how they work and the psychological traps that fool even smart traders.
đź“Ś What is Token Supply?
Token supply is simply the number of coins/tokens that exist or will ever exist for a project.
It’s divided into:
🔵 Circulating Supply
🔵 Total Supply
🔵 Max Supply
Each one matters for your investment decisions.
🔵 Circulating Supply
This is the number of tokens currently in circulation and available for trading.
It includes active tokens and excludes locked, reserved, or burned ones.
Used to calculate Market Cap:
Price Ă— Circulating Supply
Bitcoin’s circulating supply = 19.88 million BTC
🔵 Total Supply
This is the total number of tokens created so far, minus any that have been burned.
It includes both circulating and locked tokens.
It does not include tokens yet to be minted.
Bitcoin’s total supply is also 19.88 million BTC meaning all mined tokens are in the market.
Some coins have different Total Supply from circulating supply, this means some Tokens have been Locked.
Those with same like bitcoin means everything is available for trading.
🔵 Max Supply
Max supply is the hard cap on how many tokens can ever exist.
Once this number is reached, no more tokens can be created through Mining or staking.
Bitcoin's Max Supply = 21M BTC
→ 19.88M in circulation
→ 1.12M left to be created through mining.
Only 21 Million will ever exist.
Not Every coin has Max Supply.
Ethereum has No max supply (it can keep growing forever)
📌 Now let’s look at 3 common psychological misconceptions around supply that mislead traders especially Newbies.
1.Cheap Price = Huge Potential.
“This token is only $0.00004 — if it hits $1, I’ll be rich!”
They ignore the supply.
A token with 100 trillion supply at $1 = $100 trillion market cap.
That’s not happening, it would exceed the value of all crypto combined.
Who will provide that liquidity for 1 project?
Focus on market cap, not price.
2. Scarcity = Guaranteed Value
“If there are only 21M tokens or Small number in millions, it must rise like Bitcoin!”
Scarcity only works when there's demand.
A token with 1 Millon supply and no demand won’t move.
A token with 1 Trillion supply and strong demand can still pump.
Scarcity without demand = noise.
3. Supply Unlock = Immediate Dump
A project has 1B tokens, but only 100M are circulating. People fear a 900M token unlock.
Fear of dilution or dev dumping can kill a token even with good fundamentals.
đź“Ś What to do:
🔵 Check who holds the locked tokens
🔵 Read the Tokenomics for clarity and check vesting schedules.
🔵 You can Check Vesting Schedules on Crypto Rank.
🔵 You can Check who Holds supply and what percent on Bubble Maps.
🔵 Don’t panic without data.
Token supply is more than a number.
đź“Ś Ask questions like;
🔵 What’s circulating?
🔵 Who holds the rest?
🔵 Is there a cap?
🔵 Is there demand?
These answers separate smart entries from hypes and FOMO.
Always do your own research.
