High circulation supply does not automatically result in low prices. The price of an asset is determined by a combination of factors, not just supply. Here’s why high circulation supply can still coincide with high prices:
Strong Demand:
If demand for an asset is very high, even with a large supply, the price can remain elevated. For example, currencies like USD have high supply but retain significant value due to global demand.
Utility and Adoption:
Assets with high utility, real-world use cases, or widespread adoption can sustain high prices regardless of their supply. For instance, Ethereum has a high supply but maintains a strong price due to its utility in smart contracts and decentralized apps.
Scarcity Relative to Use:
Even if supply is high, if it's spread thin across many users or applications, it can still be perceived as scarce, supporting higher prices.
Brand and Perceived Value:
Strong branding, trust, and perception can sustain high prices, even for assets with large supplies. Companies like Apple have high market capitalizations despite a large number of shares.
Market Speculation:
Speulators and investors may push prices up based on future expectations, regardless of the current supply.
In summary, while supply is an important factor, it's just one part of the broader equation that determines an asset's price. Demand, utility, market sentiment, and other dynamics play equally critical roles.