Circulating Supply in CryptoCurrencies: What is it and how does it work?
When a potential investor thinks about choosing a project for investment, he has to analyze a certain number of coin’s characteristics. This is necessary in order not to invest in an overtly scam project. One of these mandatory criteria is the circulating supply of cryptocurrency.
The term "circulating supply" means the number of coins in free circulation, which are is in the hands of the population. This is the case when less is more. It is simple: the less coins are in circulation, the more money people are willing to pay for them.
When choosing a cryptocurrency for investment, an investor may face scammers. If the project offers a huge amount of its tokens in exchange for one Bitcoin or another liquid asset, beginning investors will think that this is a good deal. For example, having received 50,000 tokens for one Bitcoin, with the growth rate of the token 10 times, the investor will also increase his initial investment by 10 times. However, most likely he will never await for this moment. The reason is that projects that have a large or unlimited emission, most likely are not rest on a realistic foundation, but make money by elementary market speculations. Such a “startup” can very quickly go bankrupt and its tokens will cost nothing. Nevertheless, there are exceptions. For instance, ether has unlimited emissions, but despite this is a recognized asset.
Thus, the smaller the cryptocurrency emission is, the more likely this coin will soar in price.