Giulia
Sun Jul 21 2024
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7 answers
1506
What happens when a crypto hits max supply?
Cryptocurrencies operate on a variety of economic models, and one key aspect is the maximum supply, often referred to as the "hard cap." So, what happens when a crypto hits its max supply? Firstly, it signifies that no further coins or tokens can be mined or created, thus introducing scarcity into the system. This scarcity often drives up the price as demand remains high or increases. However, it's important to note that price is not solely determined by supply; market sentiment, usage, and adoption also play crucial roles. Additionally, some cryptocurrencies have mechanisms that allow for coin burning or token buybacks, further reducing the circulating supply. Ultimately, hitting max supply often signals a milestone for the crypto community and can potentially strengthen the asset's long-term value proposition.
