The circulating supply of a cryptocurrency is just one factor to consider when evaluating a project. While a low circulating supply may create scarcity and potentially impact the price dynamics, it should not be the sole determining factor in your investment decision.
I can't fully agree with you on this point that circulating supply should not be the sole of determining factor for investment decision. Becuase circulating supply is always a big factor to flow of price.
I if you want a example for that then saw the incident of Luna. Here it is easy to understand that if the investors of that coin are less i.e. the demand is less and the circulating supply increases continuously through mining then the value of that coin decreases day by day. And that is why project are make this burning option.