How does Bitcoin’s supply limit influence its price?

How does Bitcoin’s supply limit influence its price?

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Bitcoin has a hard supply cap of 21 million coins, a feature designed to create scarcity and prevent inflation. This fixed supply plays a crucial role in shaping the BTC price over the long term.

Unlike fiat currencies, which governments can print indefinitely, Bitcoin’s supply limit makes it a deflationary asset. As demand grows and fewer coins remain available, the scarcity tends to push prices higher. This supply constraint is especially impactful during periods of increasing adoption or macroeconomic uncertainty, where Bitcoin is seen as “digital gold.”

The supply limit combined with mechanisms like halvings means new BTC enters the market at a slowing rate, reinforcing scarcity. Over time, this scarcity is expected to strengthen Bitcoin’s store-of-value proposition and influence price appreciation.

For those curious about how scarcity interacts with market demand in real time, checking the continuously updated BTC price offers valuable insight into Bitcoin’s unique economic model in action.

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