Circulating supply is the number of coins currently in the market. Market cap is that number multiplied by the current price. Supply is the input; market cap is the output.
Circulating supply is in the market now and drives market cap. Total supply includes all minted coins including locked ones. Max supply is the hard cap and drives fully diluted valuation (FDV).
~19.8M BTC circulating × $95,000 = ~$1.88T market cap. With a 21M max supply, FDV is ~$2.00T — only about 6% above market cap.
Block rewards and mining, vesting unlocks, token burns (e.g. ETH burns from EIP-1559), and halvings (Bitcoin's reward halves every ~4 years).
Related: Fully Diluted Market Cap · What Is Market Cap in Crypto?