The Concept Of Demand And Supply In The Cryptomarket #001

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Hello crypto friends,

I believe you are all doing perfectly fine and are enjoying your activities in the community.

It is another beautiful day, and I am happy to come before you all to discuss on a topic of great importance.

We all know that the cryptomarket is greatly influenced by the concept of demand and supply.

Without demand and supply, the cryptomarket will will remain in a consolidated state and as such, it will make it impossible for traders to make profit from the market.

Today, we shall be focusing our attention on supply in the cryptomarket.

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THE CONCEPT OF SUPPLY IN THE CRYPTOMARKET

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The concept of supply in the cryptomarket plays a very important role in the dynamics of the cryptomarket, influencing it's volatility, it's value and its overall ecosystem.

Cryptocurrency which is a digital asset that is dependent on cryptographic technology for it's security is solely dependent on some economic factors to build their worth.

Supply which is one of the fundamental element can be explained to be the total number of cryptocurrency that are available in the market for circulation/trading.

Acquiring a detail understanding of supply in the cryptomarket requires an exploration of some basic factors such as inflation, deflation, circulating supply, total supply and their effect on market dynamics.

Total supply in the cryptocurrency market is known to be the total number of cryptocurrency units that can ever come into existence.

Circulating supply on the other hand refers to the total number of cryptocurrency unit that are available in circulation for trading.

These figures are very important as they have a direct impact in cryptocurrency scarcity, having a great influence in it's value proposition.

Using bitcoin for example, it has a total supply of 21million coins, thus developing a sense of scarcity that drives its market value.

This scarcity of cryptocurrency is what different digital assets from Fiat currency which can be created anytime by the central authority.

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Inflation and deflation are known to be economic concepts in the cryptomarket that affects greatly the supply and value of a cryptocurrency.

Inflation in the market occurs when there is a supply increase in the cryptocurrency over a specific time and period, either as a result of token issuance or mining reward, causing a decrease in the value of the asset.

Deflation on the other hand occurs as a result of decrease in supply of a digital asset which is often as a result of halving events or coin burn.

The halving events of bitcoin for example often decreases the rate at which new coins are mined, thus contributing to it's deflationary nature

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CONCLUSION

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Supply is a very important concept in the cryptomarket that affect greatly of the price of cryptocurrency maket.

To understand the movement of the market, you need to understand the concept of supply and demand in the market.

We shall continue our discussion next time and we shall be learning about demand in the cryptomarket.