An approximation of the number of coins or tokens that are circulating in the public market.
The term circulating supply refers to the number of cryptocurrency coins or tokens that are publicly available and spreading in the market.
The circulating supply of a cryptocurrency can increase or decrease over time. For example, the circulating supply of Bitcoin will gradually increase until the max collection of 21 million coins is reached. Such a gradual increase is related to mining that generates new coins every 10 minutes, on average. Alternatively, coin burn events like the ones performed by Binance cause a decrease in the circulating supply, permanently removing cash from the market. The circulating collection refers to the coins accessible to the public and should not be confused with the total supply or max supply. The total supply is used to quantify the number of coins in existence, i.e., the number of coins already issued minus the burned coins. The total supply is the sum of the circulating collection and the coins locked up in escrow.
On the other hand, the max supply quantifies the maximum amount of coins that will ever exist, including the cash mined or made available in the future. Moreover, the circulating supply of a cryptocurrency can be used for calculating its market capitalization, which is generated by multiplying the current market price with the number of coins in circulation. So if a particular cryptocurrency has a circulating supply of 1,000,000 coins, which are being traded at $5.00 each, the market cap would be equal to $5,000,000.