Do You Know What 'Deflationary Cryptocurrencies' Are? Understand Why They Attract Investors

Not all crypto works like $BTC. Some have mechanisms that reduce their supply over time, which can lead to appreciation. These are called deflationary cryptocurrencies.

But what does that mean?

In economics, an asset is deflationary when its quantity decreases over time, which can make each unit more valuable. This is the opposite of traditional currencies (like the dollar), which are inflationary — governments constantly print more money.

In the crypto world, this effect is created in ways such as:

Burning (token burn): a portion of transaction fees is eliminated, reducing the total in circulation.

Limited supply: like $BTC, with 21 million fixed units.

Halving: a mechanism that cuts the mining reward in half, as in the case of Bitcoin.

Examples of cryptos with deflationary characteristics:

$BTC (limited supply and halving);

$BNB (quarterly burn);

$ETH (EIP-1559 introduced burns in each transaction).

The logic is simple: lower supply + high demand = potential appreciation.

That's why many people are keeping an eye on this type of crypto. But be careful: it’s not just the supply that determines the price — the project, adoption, and market also play a significant role.

Did you already know this concept?

#Write2Earn #BinanceSquare #MarketRebout #BinanceAlphaAlert #BinanceLeadsQ1

$BTC $ETH $BNB $SOL $MATIC