Considering supply in smart investment

​The rise in demand for a product will generally lead to a rise in its price. However, this is not realistic when there is excessive supply.

There are different types of supply:

•  Total Supply — the maximum amount of the product that can ever exist (over a year, month, or the product’s lifetime). It can be fixed or flexible, depending on the company’s policy.

•  Maximum Supply — the total amount the company allows to be released to the public (unrestricted and unreserved supply).

•  Circulating Supply — the amount that is already in the market and available for trading.

Example – Product Alfa

•  Total Supply: 100

•  Maximum Supply: 80

•  Circulating Supply: 60

The difference between Total Supply and Maximum Supply is that the company may reserve part of the total supply (e.g., 20 units kept in its vault). The difference between Maximum Supply and Circulating Supply is that the company may hold back some of the maximum supply for later distribution (e.g., during holidays or to a specific group of people).

Understanding these figures helps you track the market, analyze financial markets, and determine your own status and positions.

A product with limited or fixed supply — especially one that has real utility — is generally better for the market. Only the tokens already in circulation are being bought and sold. When no new supply is entering the market, high demand can drive the price higher. In contrast, excessive or flexible supply means there is more than enough product available, which limits how much demand can push the price up.

When supply is flexible, additional products can be released into the market. This tends to put downward pressure on prices because more people sell.

Example: Apple devices. The price of older iPhones often drops when a new model is released, because many owners sell their previous phones to buy the new one (increased supply of the older models).

However, the enemy of utility is hype.

For long-term investment, avoid hype and look for real utility.

Supply on Crypto currency 

BTC Supply Statistics

•  Maximum Supply: 21 million

•  Total Supply: ≈ 20 million

•  Circulating Supply: ≈ 20 million

Use this same format to analyze the supply of any token or project:

Token Supply Statistics

•  Maximum Supply: ?

•  Total Supply: ?

•  Circulating Supply: ?

Before you invest, always examine the supply statistics. They are essential for calculating market capitalization, which is a key part of token analysis.

A token with a total supply of 50 million versus one with a total supply of 1 billion — which do you think will attract more investors?

Definitely the one with the 50 million supply.