Does circulation affect a cryptocurrency price?


#1

does circulation affect a cryptocurrency price?


#2

Yes, currency’s emission plan definitely affects the price. The more tokens are planned to be issued, the cheaper will be the price per token.


#3

Circulation and distribution strategy is very important. For the coin to increase value it needs to create desirability across users. It may be justified or not - “pumped”.
In the case of an inflated price (due to hype) then it will be "dumped’ and the price drops.
Supply and demand.


#4

Circulation * price = market cap

Which is a pretty decent way of thinking about the “cost” of a company/coin.


#5

That’s a good point Figaro make about market cap. People talk about Ethereum passing bit coin? Ethereum would not have to reach the same price to do so. The circulating supply of Ethereum is approximately 5.5 times more than that of Bitcoin.

Bitcoin price today is: $4,370
If Ethereum was to reach: 4370 ÷ 5.5 = $795

While Bitcoin was at $4,370 then Ethereum at $795 would become the new number 1 coin.