LESS IS MORE IN CRYPTO: WHY CIRCULATING SUPPLY MATTERS
Small is good, even in the crypto world. Bitcoin has only 16,649,087 circulating supply. Ethereum only 95,343,248. When you see the new & upcoming ICOs all announcing large number of coins in exchange for 1 ETH or 1 BTC, you think..wow a good deal, right? Actually not. All they are doing is to somehow sell these coins to you & disappear.
It sounds great when you get 25,000 coins for 1 ETH with a circulating supply of 10 Billion coins. You start dreaming that you will be Millionaire, if you invest 4 ETH and if this coin hits 10 $. But unfortunately with such a large supply you would be holding these coins maybe till your retirement or even longer.
Many ICOs with weak product & concept are now trying to raise money by making you dream these figures. Trend is coming to back to reality. If any ICO is valuing themselves very cheap, it is now taken by everyone as scam ICO.
Correct valuation of any ICO depends on what kind of budget they need for the product to be successful in the market & how much demand they can generate for the coins on exchanges. The demand is only generated if the product or the news from the company is positive. With hundreds of ICOs being launched each month, the coins with most circulating supply will be dumped all over the world.
A good circulating supply creates demand with investors. Look at the stock market, Berkshire Hathaway stock is trading today at $ 282,810 USD. That is the price for 1 Stock & valuation of 465.3 Billion USD. Because the circulating supply is less. Same goes for Bitcoin, it will reach probably by end of the year 7,000 USD.
What is the good circulating supply?
Anywhere between 60 Million — 150 Million is a good circulating supply for any cryptocurrency. Take a look at the chart on Coinmarketcap.com. All the currencies having 150 Million or less in circulation have appreciated so quickly in price…or as they say in crypto world, gone to the moon.
Look for the circulating supply when you invest in any cryptocurrency ICO. The more petite the circulating supply is, the more sexier it is going to look in your wallet in a few months.
