What does the maximum supply of a cryptocurrency mean?

Cryptocurrency supply and demand The value of cryptocurrency is determined by supply and demand, just like anything else that people want. If demand increases faster than supply, the price goes up .

This means that only 2 million Bitcoins are left to be mined. So, what happens when Bitcoin runs out of supply? It’s obvious that once the remaining Bitcoins are mined, Bitcoin as an asset, will become more scarce and miners will be dependent on transaction fees, instead of block rewards .

What Is Max Supply? Max supply is the best approximation of the maximum amount of coins that will ever exist in the lifetime of the cryptocurrency . Once the maximum supply is exhausted, no new coins or tokens will be produced or mined.

Bear in mind that it is important to monitor the circulating supply of a cryptocurrency – not the total supply . After all, it is only the circulating supply that is really available on the market right now. The market cap of a cryptocurrency more or less reflects the popularity of a coin over a longer term.