On Hive, the virtual supply refers to the amount of $HIVE potentially available. This includes both $HIVE in circulation along with the amount that could be created from Hive Back Dollar (HBD) conversions.
Each HBD can be converted into $1 worth of $HIVE. Depending upon the price of $HIVE, this equates to a certain amount for each HBD.
An example is the market price of $HIVE of 50 cents. This means that each HBD could be converted to 2 $HIVE. Thus, 10 million HBD would add 20 million $HIVE to the virtual supply.
If the price of $HIVE moves higher against the USD, there is less of a virtual supply. The opposite happens when the price moves down.
This is only a potentiality since, for it to be reality, the conversion mechanism has to be utilized.
Also, since a large portion of HBD is locked in the Decentralized Hive Fund (DHF), it is not eligible to be converted and should be backed out of the numbers pertaining to this.
