How does the limited supply of bitcoins affect its value?

3 answers

• Hélio Augusto OliveiraMar 10, 2023 · 2 years ago
  The limited supply of bitcoins plays a significant role in determining its value. Bitcoin has a maximum supply of 21 million coins, which means that there will only ever be 21 million bitcoins in existence. This scarcity creates a sense of rarity and exclusivity, which drives up demand and subsequently increases its value. Additionally, the limited supply of bitcoins prevents inflation, as there is no central authority that can create more bitcoins at will. This scarcity combined with the increasing adoption and use of bitcoin contributes to its value as a decentralized digital currency.
  594

  297
• G RYFeb 08, 2022 · 3 years ago
  The limited supply of bitcoins is a fundamental aspect of its value. With a fixed supply of 21 million coins, the demand for bitcoins can drive up its price. As more people become interested in owning bitcoins, the limited supply creates a sense of urgency and competition, leading to higher prices. This scarcity also makes bitcoins a store of value, similar to gold. Just like gold, which has limited availability, bitcoins are seen as a finite resource that cannot be easily replicated. This perception of scarcity contributes to the value of bitcoins as a digital asset.
  574

  192
• AadilFeb 10, 2024 · a year ago
  The limited supply of bitcoins is a key factor in determining its value. As the demand for bitcoins increases, the limited supply creates a situation where there are more buyers than available coins, driving up the price. This scarcity also makes bitcoins a desirable asset for investors looking for a hedge against inflation. Unlike traditional currencies that can be printed by central banks, bitcoins have a fixed supply that cannot be manipulated. This limited supply ensures that the value of bitcoins is not diluted over time, making it an attractive investment option for those seeking a decentralized and finite digital currency.
  637

  160