How does Bitcoin’s supply scarcity influence its price?
How does Bitcoin’s supply scarcity influence its price?
Blog Article
Bitcoin’s fixed supply of 21 million coins is a fundamental factor influencing the BTC price. Unlike fiat currencies, Bitcoin cannot be printed or inflated arbitrarily, which creates a scarcity effect as demand grows.
As more people adopt and hold Bitcoin, the available supply on exchanges diminishes, potentially leading to price increases. This scarcity is often compared to precious metals like gold, which are valued for their limited availability. Understanding this dynamic in relation to the current BTC price helps investors appreciate Bitcoin’s unique economic model.
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