How does the circulating supply of crypto affect its price?

1 answers

• Dec 28, 2021 · 3 years ago
  The circulating supply of a cryptocurrency is an important factor that can impact its price. When the circulating supply is low, it creates scarcity, which can drive up the price. This is because there are fewer coins or tokens available for purchase, and buyers may be willing to pay a higher price to acquire them. On the other hand, when the circulating supply is high, it can lead to price depreciation. This is because there is an abundance of coins or tokens in the market, and sellers may have to lower their prices to attract buyers. It's worth noting that the circulating supply is just one of many factors that can influence the price of a cryptocurrency. Other factors, such as market demand, investor sentiment, and technological developments, also play a role in determining the price.
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