Actually digital market is same like finance market. Price ups and down because of demand and supply same with cryptocurrencies prices.
Lets understand with a example but first we have idea about demand and supply in cryptocurrencies market.
Market Demand:Total quality demanded by all customer to buy specific goods. Customer pay price for desire goods which they want to buy from market.
Market supply:Total quality of goods supply by market to the customer.
How cryptocurrencies prices are ups and down in market
Lets learn it with a mango example.If i have 10 mangoes and each mango have 0.50$ price.So it is possibility to buy are mangoes by one customer or two customers.
If i a person decide to eat mango and want to become healthy.Mainwhile,i advertise my Mangoes in market ,that my Mangoes are best Mangoes in market as well as good healthy effect.so people would start buying Mangoes from me. So i have large number of customers but i have low stock so definitely i would increase the price of mangoes , so that customer would buy mangoes from me at any cost .
So demand increases so price increase because have less stock so my Mangoes value is high
Another hand a man taste my mango, he come to knoe that my Mangoes look good from outside but are citrus inside. So he tell this to everyone he is making fool and its mangoes are citrus from inside, so your investment is useless.There is no benefit to buy or invest in my mangoes.So customer of my Mangoes would decrease and i have big stock of mangoes so definitely i would reduce Price that anywho anyone can buy my Mangoes and get rid of them.
Customer decrease so Prince decrease because i have big stock wanna sell all at any cost.
Cryptocurrencies phenomena buy and sell
Same with cryptocurrencies ,when any cryptocurrency value increase only because spread news to buy this Crypto coin because it value would high tommorow so people start buying that coin blindly and when buyer increase and market have specific stock or less stock of that specific cryptocurrency coin, in results value definitely would become high.
When people started sell specific cryto coin so it value would decrease because of exchange and market would by this coin at very low price.
So this basic reason how in cryptocurrency market value goes up and down.
How cryptocurrencies values decide in digital market
Cryptocurrencies values are decide on basis of these main factors:
Market capitalization:is refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares.Here outstanding share that share with is hold by different individuals.
For Example, a company with 20 million shares selling at $100 a share would have a market cap of $2 Billion.
So why BTC price is so high ,only reason is that BTC has high market capitalization value is $111.58B.
Ethereum marketing capitalization value is $50.17B
XRP market capitalization value is $20.52B
BCH market capitalization value is $14.67B .So that's why BCH have less market value than BTC, Ethereum and XRP.
Market capitalization is effect most on the value of any Cryptocurrency and if you want to invest in any Cryptocurrency so always keep in mind about market capitalization value.
Market demand:is refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain Price,the relationship between price and quantity demanded is known as the demand relationship.
Market supply: represents how much the market can offer or can provide to customer for selling.
Why each crypto coin has different values?
As i already told that , Market capitalization , market demand and Market supply are major components and factors to decide the value or rate of a Cryptocurrency.
If we camparison between BCH and and XRP. Why XRP high rank than BCH ,only because XRP have high market capitalization value and BCH less than XRP.
But the Price of BCH is higher than XRP . BCH market price is $835.24
XRP market price is $0.52.
So that is clear that some market values are decide what would be the value and price of any Cryptocurrency.
Key point! If you want to make investment in any of cryptocurrencies.
Before doing investment in Cryptocurrencies. At which currency you want to invest ,keep the Market capitalization, Available supply , market demand and its price.
When any of cryptocurrencies is high supply in market so becareful to invest in that currency. Because its stock is high in market and customer are less.
For example Dogecoins supply is unlimited so that's why its value and price is low in Cryptocurrencies market.
So always investment which have less available in Cryptocurrencies market and have high market capitalization.
Thanks respected readers and for your pricious time. awaiting for your valueable comments and Questions!
Regards from Aasi