Crypto free float vs circulating supply: define the exclusions

Crypto circulating supply estimates the tokens a named data provider considers publicly circulating. Free float estimates the tokens available to market participants after that methodology's exclusions, such as closely held or long-dormant balances. The terms can overlap: compare the excluded balances, dates and units before treating free float as an additional reduction.

Two dashboards can show different supply counts even when they observe the same blockchain. One may exclude an unlocked foundation balance, another may apply an inactivity rule, and a third may use “circulating” as its name for public float. A useful comparison starts with the ownership ledger and counting policy behind each number.

Read the methodology before subtracting anything

There is no universal rule that circulating supply means every unlocked token while free float excludes insiders. CoinMarketCap explicitly distinguishes circulation from unlocked supply and generally excludes insider and strategic allocations, including some unlocked balances. Its methodology describes circulating supply as analogous to public float. CoinMarketCap supply definitions

CoinGecko similarly subtracts identified uncirculated wallets from total supply. Its documented exclusions include locked allocations, team holdings and foundation or treasury balances, including certain holdings that are technically transferable. Under that approach, unlocking a treasury wallet does not automatically add its contents to circulation. CoinGecko supply methodology

Coin Metrics publishes a separate free-float metric, SplyFF. Its documentation excludes closely held units and identifies long dormancy, including inactivity greater than five years, among its adjustments. That is a specific provider's measurement policy; it does not establish that inactive tokens are permanently inaccessible. Coin Metrics free-float documentation

Consequently, “free float is lower than circulating supply” needs a named pair of methodologies and matching observations. It can be true for a particular comparison, but the labels alone do not prove it. Nor should you subtract founder tokens again from a circulating figure that already excludes them.

The market cap versus FDV guide explains how different supply bases change valuation calculations. Here the task is narrower: identify exactly which issued tokens belong in each count.

Reconcile one hypothetical ownership ledger

Every quantity and classification below is hypothetical. The fictional token has issued 1,000 million units cumulatively. Of those, 50 million have been demonstrably and permanently burned, leaving 950 million in total supply. Assume one chain, fixed token units, no rebasing and no future issuance during the observation.

Our illustrative circulation policy excludes vesting allocations, project treasury inventory and founder holdings. Our illustrative free-float policy applies those same exclusions plus a dormancy exclusion for the specified public-holder group. These are declared worksheet rules, not a reconstruction of any provider's asset assessment.

Each ownership row is a distinct, non-overlapping group; the final row totals those groups. “Exchange custody” means disclosed balances belonging to public customers in this example, with no excluded founder or treasury balance mixed into that row.

Total supply is 1,000m − 50m = 950m. The 50 million burned units are already removed at this step. They must not be deducted again when starting from that net total.

Circulating supply under the stated policy is 950m − 200m − 150m − 80m = 520m. You can check it from the included side: 120m + 100m + 300m = 520m.

Free float under the additional dormancy rule is 520m − 120m = 400m. Its included-side check is 100m + 300m = 400m. The difference between the two public-supply measures is entirely the 120 million dormant tokens, rather than a second deduction of treasury or founder inventory.

The ledger also checks the full issued history: 50m + 200m + 150m + 80m + 120m + 100m + 300m = 1,000m. A reconciliation should explain every unit once, including units excluded from all current supply measures.

Keep the denominator beside the percentage

The example has at least three useful ratios. Illustrative circulation is 520 / 950 = 54.74% of total supply. Free float is 400 / 950 = 42.11% of total supply. Free float is also 400 / 520 = 76.92% of circulating supply. Percentages are rounded to two decimal places.

A dashboard saying “42.11% float” and a worksheet saying “76.92% float” could therefore describe the same 400 million tokens with different denominators. Record whether the denominator is net total supply, circulating supply or another explicitly defined base.

At a hypothetical common price of $2, the circulating calculation gives $1.04 billion and the free-float calculation gives $800 million. That $240 million gap is the same 120 million-token exclusion multiplied by $2. It does not represent cash leaving the asset.

The free-float figure is 23.08% below the circulating figure in this example. That percentage is neither a price discount nor a forecast. Multiplying an accounting count by the latest price does not establish the proceeds from selling the counted tokens. The market cap versus liquidity comparison explains why executable depth must be measured separately.

Distinguish distribution from a revised classification

Start each of the following independent scenarios from the original ledger. They demonstrate different reasons for a count to change, with no minting or burning.

First, suppose the treasury distributes 30 million tokens without restrictions to public recipients. Under our declared rules, the treasury balance falls from 150 million to 120 million and other public holdings rise from 300 million to 330 million. Circulation becomes 550 million and free float becomes 430 million. Total supply remains 950 million. The example specifies a distribution, without evidence of payment or an exchange sale.

Second, suppose new ownership evidence shows that 25 million tokens previously classified as other public holdings are still founder-controlled. No transaction occurs. Moving those units into the excluded founder group reduces circulation to 495 million and free float to 375 million, while total remains 950 million. The changed series records better classification rather than 25 million tokens disappearing.

This distinction matters when interpreting a sudden supply-chart change. Ask whether the evidence shows a transfer, a changed restriction, an updated address label or a revised methodology. Save the old and new classifications as well as the resulting count.

A scheduled unlock answers a different question again. The token unlock and dilution guide separates eligibility, release and recognized circulation. For repurchased tokens, use the same discipline: the burns versus buybacks guide separates treasury ownership from permanent removal.

Resolve the balances that resist simple labels

An address can have several properties at once. A founder wallet may also be dormant and subject to vesting. Deducting its full balance in three exclusion categories understates supply. Use one exclusion register with address identifiers and multiple reason flags, then count the union of excluded units once. If a wallet contains mixed allocations, document the attributable amounts rather than excluding its entire balance by assumption.

Custody introduces another ambiguity. A large exchange address may hold many customers' balances, the exchange's own inventory or both. Its address size alone cannot identify beneficial ownership. Our fictional ledger supplies that classification explicitly; a real analysis may need an unresolved category when public evidence cannot separate the balances.

Dormancy also needs careful wording. An inactivity threshold measures observed movement over a specified interval. It does not reveal every holder's intent or prove a lost key. If tokens move after years of inactivity, inspect the applicable methodology before deciding how the series should change. Activity alone supplies no evidence of a sale.

Staked or governance-held tokens need the actual provider's policy. Coin Metrics' index methodology identifies controlling groups, vested investors and specified long-term strategic holdings among its free-float exclusions. Avoid extending that statement into a blanket rule that every staked token is excluded. Coin Metrics adjusted free-float framework

Finally, define the economic unit before adding balances across chains. A wrapped claim and the tokens backing it may represent the same underlying units. CoinGecko's lock-and-mint methodology uses source-chain total supply rather than summing source and destination representations. Apply the provider's bridge-specific rules or keep chain-specific counts separate until you can reconcile them. CoinGecko multichain supply treatment

Build a comparison another reader can reproduce

Keep a row for every material included or excluded balance. A headline count is the result of this worksheet, not a substitute for it.

Compare providers only after aligning the asset, units and observation. If an ownership label is uncertain, calculate the effect of including and excluding that particular balance and report the unresolved difference. Do not silently choose the result that produces the more attractive valuation.

For the hypothetical ledger, the final note can be exact: 950 million total tokens, 520 million circulating under the stated ownership exclusions, and 400 million free float after the additional dormancy rule. Preserve that sentence with the ledger and policy; a bare supply number cannot carry its assumptions.