Definition ∞ Supply scarcity metrics are analytical tools used to quantify the relative availability of a digital asset in the market. These metrics assess factors such as the total circulating supply, the amount of supply held in illiquid addresses, and the rate of new coin issuance. Indicators like stock-to-flow ratios, coin age distribution, and exchange reserves provide insights into an asset’s inherent supply constraints. High scarcity often correlates with increased perceived value.
Context ∞ Crypto news often utilizes supply scarcity metrics to support price predictions and fundamental analyses of digital assets, particularly for assets with fixed or decreasing issuance schedules. Reports discuss how these metrics influence investor sentiment and long-term price potential. Understanding supply scarcity is crucial for assessing an asset’s value proposition and its resilience against inflationary pressures, making it a key component of market commentary.
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