Definition ∞ Digital asset caps are upper limits placed on the total supply or issuance of a particular digital asset. These caps are often hard-coded into a cryptocurrency’s protocol, defining its scarcity and influencing its long-term value proposition. Bitcoin, for example, has a fixed supply limit of 21 million coins. This mechanism controls inflation.
Context ∞ Digital asset caps are a fundamental characteristic frequently discussed in cryptocurrency news, especially concerning inflation and valuation models. Understanding these limits is essential for evaluating an asset’s economic model and its potential as a store of value. News reports on new digital assets often highlight their supply mechanisms and how these caps differentiate them in the market.
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