Cryptocurrencies keep up in gaining popularity among traders. It’s beneficial for modern investors to diversify and hedge their portfolios in digital currency. Thus, they implement greater security of their funds.
Meanwhile, cryptocurrencies are stepping over skepticism by offering much more than just a unit of exchange. Digital projects today have big goals, provide various services, and surprise with their scale. For instance, in the summer of 2022, the WhiteBIT crypto exchange released its native asset.
One million tokens were sold in just the first 15 minutes of a private sale on Launchpad, when a total of 400M WBT tokens will be issued.
On its native crypto platform, you can trade from WBT to USDT — more than 350 crypto pairs are at your disposal. But why are tokens limited in quantity? What is market capitalization, and how does it affect an asset? Let’s look for answers to these questions in the text below.
About the total supply
The quantity of crypto assets obtainable at any given moment can be categorized as circulating, maximum, or total supply.
Circulating supply is the amount of assets eligible for trading. Maximum supply is the max number of assets one can produce. Total supply is a foreordained supply one can’t change. E.g., WBT has a total supply of 400M, and Bitcoin can release 21M BTC in total.
The total supply mainly comprises the circulating supply and the assets secured in escrow. Conversely, the maximum supply represents the maximum amount of assets that will ever be created, including those to be mined down the road.
Great, got it sorted. Now, what happens to cryptocurrency prices depending on these supplies?
About market capitalization
Market capitalization, also known as market cap, refers to the overall value of all mined cryptocurrencies that are currently in existence. This can be determined by multiplying the quantity of digital assets in circulation by their current market price.
In crypto, burning is a mechanism that permanently removes a certain amount of assets from circulation. Thus, the price of cryptocurrency rises; the network relieves the load and protects against spam. WBTs will be repurchased and burned until at least half of all tokens are destroyed.
It makes long-term holding of the asset beneficial for traders. By the way, the WhiteBIT crypto exchange allows for monitoring live cryptocurrency prices 24/7. In addition, token holders receive a bunch of bonuses that make trading on the platform much easier.
By examining the correlation between the price of WBT Token and its market capitalization, investors can better understand how cryptocurrency is performing in the markets. A positive correlation is a good sign for traders. The cryptocurrency price is increasing as its market capitalization increases.
It suggests that digital asset is gaining popularity and its value is growing. Overall, the correlation between the WBT price and its market cap can provide investors valuable insights into the token’s popularity and demand. By understanding this relationship, traders can make more informed decisions when investing in cryptocurrency.