Supply and Demand in Cryptocurrency Markets
Supply and Demand are economic levels at which the market’s willingness to buy or sell assets or services, respectively, is determined.
What is supply and demand?
Demand and Supply can be represented as the governing forces of a market economy, which are regulated through prices. Demand and supply determine the relationship between a given good or asset and people’s willingness to buy or sell it.
- Supply is the amount of materials, assets, products or services available to the economy. It is not so much a question of how much of it exists as of how much of it people can get.
- Demand is the need for goods and services. Demand determines the number or ratio of people interested in the goods/services offered by an organization and the amount of money they are willing to pay for them.
If organizations or influential buyers acquire access to an asset, you can clearly see the market’s response. An example of a scarce asset is bitcoin, which has revolutionized the financial industry by demonstrating the enormous benefits of a digital asset with limited and finite supply. As the demand for bitcoin increases, it becomes more valuable.