Basic supply and demand economics

Hello Defions,

With the upcoming Bitcoin halvening event 10 months or so away, as well as the immanent releases of Bitcoin spot ETFs, we are about to see and experience a supply shock, we have never seen before in the crypto ecosystem. I figure it is a good time to brush up on basic supply and demand economics

Supply and demand is the backbone of economics, shaping the prices of goods and services in a market. Understanding these concepts is crucial for businesses, policymakers, and consumers alike, as it helps us comprehend the forces that determine prices and quantities in the market.

Let's begin by defining supply and demand. Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at different price levels. On the other hand, demand represents the quantity of a good or service that consumers are willing and able to buy at different price levels. The equilibrium between supply and demand establishes the market price and quantity.

The law of demand states that as the price of a good or service increases, the quantity demanded decreases, assuming other factors remain constant. This inverse relationship between price and quantity demanded can be attributed to factors such as income levels, consumer preferences, and the availability of substitutes.

Thank you for reading our newsletter on supply and demand economics. We hope it has provided valuable insights into this essential aspect of economics. Don’t forget to check us out on YouTube where we have 100+ videos of Bitcoin and Crypto content

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