Understanding the Concept of Supply and Demand
The concept of supply and demand is of utmost importance in a market economy, as it has a direct impact on the prices of goods and services. These two factors establish the relationship between a specific product or asset and the willingness of individuals to buy or sell it.
Supply refers to the quantity of a particular material, asset, product, or service that is available in the economy. It is not solely about the total amount in existence, but rather the amount that people can actually acquire.
On the other hand, demand represents the desire for products and services. It helps determine the number of individuals interested in the offerings of an organization and the price they are willing to pay for them.
When institutions or influential buyers gain access to a limited asset, the market response becomes evident. Bitcoin serves as a prime example of a scarce asset that has revolutionized the finance industry by showcasing the advantages of owning a digital asset with a finite supply. As the demand for Bitcoin increases, its value also experiences a corresponding rise.
Author: First Digital Trust
Gunnar Jaerv, the chief operating officer of First Digital Trust, is an experienced entrepreneur with a background in technology startups. He has established various tech companies, such as Peak Digital in Hong Kong and Elements Global Enterprises in Singapore.
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