Direct from the desk of Dane Williams.
It’s something we see here on LeoFinance every day.
Everyone seemingly has developed a fixation on low supply cryptocurrencies.
The idea behind this is that a limited supply of tokens can increase the scarcity of the asset, which may lead to price appreciation.
We all get that side of it.
But while this can be an advantage, it's important to note that a cryptocurrency's success is not solely dependent on its low supply.
Other factors, such as the technology behind the cryptocurrency and its adoption rate, also play a crucial role in making price increase.
In this blog post, I’m going to explore some of the best low supply cryptocurrencies to buy in 2023, before discussing why buying cryptocurrencies with limited supply can be a good investment strategy.
But not the only factor to consider!
In this section, I’ll discuss five low supply cryptocurrencies that investors could consider buying in 2023.
Yep, these are the top cryptocurrencies with a limited supply, making them potentially scarce assets that could increase in value over time.
Quant (QNT) is a blockchain-based cryptocurrency that aims to connect different networks, making it easier to transfer data and value between them.
Its maximum supply is capped at 14.6 million tokens, which gives it a nice level of scarcity compared to most other coins in the top 200.
The market cap of QNT is around $1.5 billion, indicating investor interest in its potential to bridge different blockchain networks and facilitate interoperability.
My clear choice at number 1.
Aave (AAVE) is a decentralised finance (DeFi) protocol that enables users to lend, borrow and earn interest on cryptocurrencies without intermediaries.
With a limited maximum supply of 16 million tokens, AAVE's scarcity could make it an attractive investment opportunity.
As of recently, the market cap of AAVE is approximately $1 billion, indicating its popularity among investors.
I love AAVE’s low supply, but also the fact it has genuine utility meaning you get the best of both worlds.
Monero (XMR) is my favourite privacy-focused cryptocurrency that enables anonymous transactions.
Its maximum supply is capped at 18.4 million tokens, which gives it a level of scarcity unseen in other major coins.
Monero has a market cap of around $2.8 billion which says to me that privacy coins have a real future, no matter what regulators say.
Bitcoin (BTC) is the world's first cryptocurrency, with a maximum supply of 21 million tokens.
While it is not technically a low supply cryptocurrency, the limited supply and high demand have contributed to its value growth over the years so I couldn’t leave it off my list.
Bitcoin's market cap is approximately $500 billion, reflecting its position as the most valuable and widely adopted cryptocurrency in the market.
Bitcoin is Bitcoin.
Enough said.
Bitcoin Cash (BCH) is a fork of the original Bitcoin blockchain that aims to improve transaction speed and lower transaction fees.
Its maximum supply is capped at 21 million tokens, similar to Bitcoin.
At the moment, Bitcoin Cash has a market cap of around $2.3 billion, indicating that the much maligned fork of the original, really isn’t going anywhere.
If Bitcoin made my list, then Bitcoin Cash has a large enough market cap to ensure it makes the list too.
As I mentioned above, we know investors have a weird fixation on cryptocurrencies with a limited supply, as they believe that scarcity can drive up the asset's value.
The idea behind this is that a limited supply can create a sense of rarity, increasing demand and ultimately leading to price appreciation.
However, it's important to keep in mind that a cryptocurrency's success is not solely dependent on its supply.
Low or high supply, it's the technology behind a cryptocurrency that’s the real factor behind driving value.
A cryptocurrency with innovative features, such as faster transaction speeds, enhanced security or increased scalability will always have a greater chance of success.
Additionally, a cryptocurrency's adoption rate is also critical.
The more people and businesses that use a cryptocurrency, the more valuable it becomes.
While a limited supply can create a sense of scarcity, there are also some downsides to investing in low supply cryptocurrencies.
One potential issue is that a low supply can make the asset vulnerable to market manipulation.
It's also important to consider the distribution of the tokens.
If a large percentage of the tokens are held by a small group of investors, they may have the power to influence the price of the asset.
Centralisation is always a risk.
As you can see, whether it's better to buy a cryptocurrency with a limited supply depends on a variety of factors.
If you’re going to buy a low supply cryptocurrency in 2023, make sure you still do thorough research on the technology, adoption rate and distribution of tokens before blindly buying on max supply alone.
By considering these factors, you can at least make an informed decision before you lose your money.
Best of probabilities to you.
