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Is the supply of Bitcoin limited?

  1. Yes, it is limited

  2. No, it is unlimited

  3. It is capped at 100 million

  4. It varies with market demand

The correct answer is: Yes, it is limited

The supply of Bitcoin is indeed limited, and this characteristic is fundamental to its design and value proposition. Bitcoin has a maximum supply cap of 21 million coins, which was established by its creator, Satoshi Nakamoto. This cap means that there will never be more than 21 million Bitcoins in existence, making it a deflationary asset. This limited supply is intended to create scarcity, similar to precious metals like gold, and is part of what underpins Bitcoin's value. As new Bitcoins are mined, the rate at which they are produced halves approximately every four years in an event known as "halving." This halving reduces the rate of new Bitcoin being introduced into circulation over time, further enforcing the scarcity. Understanding this cap is crucial for comprehending Bitcoin's market behavior and its appeal as a store of value. The limited supply contrasts sharply with fiat currencies, which can be printed in unlimited quantities by governments, leading to inflation. The other answers suggest various misunderstandings of Bitcoin's supply dynamics. For instance, stating it is unlimited contradicts the foundational principle of Bitcoin's structure. Meanwhile, the incorrect figures like 100 million and variations based on market demand misrepresent how Bitcoin's supply is determined and managed.