Everyone is talking about the crypto prices right now. It’s going up, going down and so on. So, have you ever wondered why or what exactly determines these crypto prices?
What are the major factors that affect cryptocurrency price?
1. Supply and demand
Basically one of the basic principles of an economy. If the supply of a cryptocurrency is really high while the demand is really low, the price of that cryptocurrency will fall. While on the other hand, if the supply is limited and the demand is high, the price of the cryptocurrency is going to go high
2. Social media hype and human emotion
One of the factors which is probably the most important factor in determining the price of cryptocurrency. A good example is when Paypal announced that it will support bitcoin, bitcoin cash and other crypto. This is a huge thing and also the human emotion which is widely known in crypto universe as FOMO, the fear of missing out, this was one of the key factors back in 2017 which determined the prices of cryptocurrencies. When Bitcoin reached its all-time high, everybody is talking about that and because of that it affected every crypto prices.
3. Usefulness of the cryptocurrency
Some might think that cryptocurrencies are a type of investment and that is it. Well, technically it is correct but it is more than just an investment. In fact, a lot of cryptocurrencies have various different functionalities besides being an obvious investment. Some of these can be for hiding identification, some for storage and a lot more.
4. Whales
This are the super-rich people who basically manipulate the entire cyrptocurrency. They have the power and pretty much they have the money to do so. And this is something that is really looked at down upon in the crypto universe. This is why some people in the crypto universe do not want a regulations.
With all the sudden rise of price in the cryptocurrency, what factors do you think that affected it? Please leave a comment down below.
Ps: with the current price, is it okay to sell now and buy the dip later
Burning of some of the quantities of the cryptocurrency might cause a huge rise in price, because this action might tend to reduce the circulating supply of that particular coin