The Best Way To Increase The Value Of A Coin - Low/No Inflation Plus A Buyback And Burn

Economic theory can be complex but there when it comes to supply and demand of a coin and how to increase the price of a coin the idea of no inflation combined with a buyback and burn is a simple process that can greatly increase the value of a coin. No only does it increase the value but ultimately it is consist and can have any coin reaching ATHs. But in order to achieve this goal you need to have money coming in that doesn't come from your coin itself and this is a big hurdle that a lot of crypto projects have not addressed. This has lead to the downfall of many projects.

Why Does Little To No Inflation Matter?

Let's start with the number of coins that are on the market. The more coins the harder it will be to raise the price and the less coins that are on the market the easier the coin can go up when money enters the market. It is not as simple as that and you see coins with high total supply still do well on coin market cap but the principal holds that the less supply you have of something the more valuable it can be when demand arrives. This is what gives crypto a lot of potential. Coins usually have a fixed supply and this means that at some point, if money keeps coming in, the value of a coin should go up. However some coins have an inflation problem where they release too many coins a year and this will hinder any bullruns that may happen in the future. The goal of a coin should ultimately be adding zero coins to the total supply a year and if that is not possible (which it rarely is) then adding as little coins as possible so the money for buybacks and burns is greater than the increasing supply.

Buyback And Burn

To buyback and burn means you buy the coin off the market and "burn" it, which means send the coin to an address that nobody can access and thus take it off of the market. The more you do this, the more the value of the coin will rise. In order to do this though you need money from outside of crypto. You cannot make money from selling your coin as that will increase the coin count on the market. Things like advertising works as that is USD coming is from the views you get from your site. That is money that is not directly tied to your coin and that is money that can be used to buy coins off of the market and get rid of them. The best company for this right now is Binance which takes its profits from trading and uses that to get rid of BNB. That is the number 1 reason their coin is worth so much even in the bear market.

Ways To Burn Crypto

But it doesn't have to buy straight-out buybacks to get rid of a coin. You can charge coins for any type of service and then burn those coins as you go. This will help to lower the supply as the site becomes more popular. This also has the benefit of working from a community stand point and can really can up with thousands of users all taking part instead of one party. As long as you can lower the supply you are primed to make a big jump when the demand takes hold.

Putting It All Together

With burning you lower the supply of the coin and with zero/no inflation you keep that supply low year after year. What this does it raise the value of your coin with every burn. The money coming in for the burns is the demand that is consistently coming in and with a fixed total supply the only number that is left to go up is the price of the coin. As long as money is coming in the value will continue to grow as that value has to go somewhere. Inflation would dilute that value but if the supply is the same and the money (demand) is coming in, then you are looking at a steady increase in value.

This is why inflation really matters in crypto and why you can set-up an ecosystem for your economy that will constantly push up the value of a coin. If you can master this one strategy and get money coming in that doesn't depend on the coin itself you can have a very successful crypto business that can compete with any non-blockchain site.

Posted Using LeoFinance