We know that smaller smaller fraction of bitcoin termed satoshi are going to be a big deal as the price of bitcoin keep increasing and so, even though we might have just 21 million bitcoin in circulation. the division of bitcoin into smaller units of satoshi makes it even more than the 21 million because the vast majority of people can not buy upto a single bitcoin but can buy just some sats from it. the metrics around it that allows for buys and sells stands in a way that keeps the limitation bitcoin that is in circulation useful amd enough for all investors.
First we are not talking about $21m. We are talking about bitcoin circulation, base on what you say here base on my understanding, when the value of bitcoin increases it will lead to increased in circulation. But it doesn’t work that way because when one by 1 BTC and keep in a wallet no matter how the price increases that folk will still be holding that same 1 BTC the different is that the value will surely increase due to price going up .
The 21M circulation is fixed it won’t change that will be the number of bitcoin that’s going to be mined which shows that bitcoin is limited in supply which will surely lead to scarcity. But doesn’t mean that will be the amount circulating due to burnt coin , lost UTXO and some other stuff.