You make a solid point! The relationship between circulation supply and price is complex and influenced by multiple factors. To summarize and expand on your observations:
1. Strong Demand: High demand can offset the effects of large supply. For instance, globally adopted currencies like the USD maintain their value because of widespread trust and utility.
2. Utility and Adoption: Assets with practical applications, such as Ethereum's role in decentralized finance and smart contracts, hold significant value despite a high supply. Utility creates consistent demand.
3. Scarcity Relative to Use: Perceived scarcity, even with a high supply, can keep prices elevated. For example, Bitcoin is often seen as scarce due to its capped supply and concentrated ownership.
4. Brand and Perceived Value: Strong branding and trust in an asset (whether a company like Apple or a cryptocurrency like Bitcoin) can drive prices up, regardless of the underlying supply.
5. Market Speculation and Sentiment: Speculative investments often drive prices beyond what supply and demand dynamics alone would justify. For example, during bull markets, enthusiasm and future potential can lead to overvaluation.
Ultimately, price is a dynamic interplay of these factors, and a high circulation supply doesn't necessarily mean low prices if other variables—especially demand and utility—are favorable.
