How does the supply curve of digital currencies affect their value?

1 answers

• Dec 18, 2021 · 3 years ago
  The supply curve of digital currencies has a significant impact on their value. When the supply of a digital currency increases, its value tends to decrease due to the increased availability. This is because a larger supply of a currency leads to a decrease in scarcity, which in turn reduces its value. Conversely, when the supply of a digital currency decreases, its value tends to increase as it becomes more scarce and in higher demand. It's important to consider that the value of digital currencies is also influenced by other factors such as market sentiment, technological advancements, and regulatory changes. Therefore, understanding the supply curve is just one aspect of evaluating the value of digital currencies.
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