Why is it important for investors to consider both the circulating supply and total supply of a cryptocurrency before making investment decisions?

1 answers

• Dec 18, 2021 · 3 years ago
  Considering both the circulating supply and total supply of a cryptocurrency is essential for investors to evaluate its potential investment value. The circulating supply represents the amount of coins or tokens available for trading in the market. A higher circulating supply may indicate a larger market cap, but it could also mean lower scarcity and potentially lower demand. On the other hand, the total supply represents the maximum number of coins or tokens that will ever exist. It is important to consider the total supply because it can impact the potential for future inflation or dilution of the cryptocurrency. By analyzing both the circulating supply and total supply, investors can assess the scarcity, demand, and potential growth of the cryptocurrency, which are crucial factors in making investment decisions.
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