Supply Cap

Definition ∞ A supply cap designates a predetermined maximum quantity of a digital asset that can ever exist. This fixed limit is a design feature intended to create digital scarcity, potentially influencing the asset’s long-term value proposition. It contrasts with assets that have inflationary issuance models.
Context ∞ The concept of a supply cap is a foundational element in the economic design of many cryptocurrencies, notably Bitcoin. News articles frequently analyze how this fixed supply interacts with demand dynamics to influence price appreciation and its role as a potential store of value. Current discussions often compare the economic properties of capped-supply assets with those that have elastic or inflationary issuance mechanisms, examining their respective implications for market behavior and adoption.