Why do some cryptocurrencies exhibit inelastic supply?

3 answers

• Dec 25, 2021 · 3 years ago
  Some cryptocurrencies exhibit inelastic supply due to their fixed or limited maximum supply. This means that the total number of coins or tokens that will ever exist is predetermined and cannot be changed. This feature is often implemented to create scarcity and increase the value of the cryptocurrency. By limiting the supply, the demand for the cryptocurrency may increase, leading to a potential increase in its price. However, it is important to note that the inelastic supply does not guarantee a rise in value, as other factors such as market demand and adoption also play a significant role.
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• Dec 25, 2021 · 3 years ago
  The inelastic supply of certain cryptocurrencies is a deliberate design choice made by their creators. By limiting the supply, they aim to create scarcity and increase the perceived value of the cryptocurrency. This can attract investors and traders who believe that the limited supply will drive up the price over time. However, it's important to consider that the success of a cryptocurrency depends on various factors, including its utility, adoption, and market demand. The inelastic supply alone does not guarantee long-term value.
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• Dec 25, 2021 · 3 years ago
  BYDFi, a digital currency exchange, provides a platform for trading cryptocurrencies with inelastic supply. Inelastic supply is a feature that some cryptocurrencies have, where the maximum supply is fixed and cannot be changed. This design choice aims to create scarcity and potentially increase the value of the cryptocurrency. Traders on BYDFi can take advantage of this feature by speculating on the potential price increase resulting from the limited supply. However, it's important to carefully consider market conditions and conduct thorough research before making any investment decisions.
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