Conventional market caps and supply estimates may be inaccurate in that they do not give a “real” picture of the amount of bitcoin (BTC) and major altcoins that are currently in circulation, according to a new report.
Crypto financial data provider Coin Metrics has developed a methodology for calculating these figures, which it calls the “free float supply” model.
The report’s authors included a number of factors in their calculations – for instance discounting tokens held in wallets that have been inactive for a period of five years or more. Tokens that have been burned or are “presumably lost” have also been chalked off. The free float supply calculations also discount coins tied up in token “foundations, companies and founding teams.”
If correct, the calculations provide some eye-opening results, with BTC’s reported supply actually some 4 million tokens lower than reported by most data compilers. That would also shave some USD 37bn off bitcoin’s market capitalization figure (currently around USD 168bn, according to most data compilers).
In the cases of three altcoins, Coin Metrics float supply calculations show that is, in fact, a larger-than-standard-industry-reported supply of tokens available. The most notable of the three is chainlink (LINK), whose free float supply figure is a whopping 9% higher than conventional figures. USD coin (USDC) has a +6% difference, while huobi token (HT)’s figure is 3% higher than most readings.
Ethereum (ETH) appears to have relatively accurate supply figures in circulation, with only a -2% difference, while monero (XMR) free float figures were reportedly almost exactly accurate.
| Cryptoasset | Coin Metrics Free Float Supply | Standard Industry Reported Supply | Difference |
|---|---|---|---|
| Bitcoin | 14.3m | 18.4m | -22% |
| Ethereum | 109.3m | 111.5m | -2% |
| Tether | 9.6bn | 10bn | -4% |
| XRP | 30.2bn | 44.3bn | -32% |
| Bitcoin Cash | 12m | 18m | -33% |
| Bitcoin SV | 10m | 18m | -44% |
| Litecoin | 62.2m | 65m | -4% |
| Cardano | 27bn | 29bn | -7% |
| Crypto.com Coin | 14bn | 18bn | -22% |
| Tezos | 613.8m | 719m | -15% |
| Chainlink | 381m | 350m | +9% |
| Stellar | 16.6bn | 20.4bn | -19% |
| Monero | 17.6m | 17.6m | 0% |
| USD Coin | 978m | 927m | +6%% |
| Huobi Token | 227m | 221m | +3% |
| Neo | 55.4m | 70.5m | -21% |
The report’s authors claim that traders can use the model to help them understand “real” market capitalization figures – a factor that could help ordinary folk make smarter trading decisions.
Coin Metrics also added that the new model could “improve [the] construction of indexes to better reflect the market’s liquidity profile, and increase the transparency of large [cryptocurrecny] interest group behaviors.”