Wednesday, August 10, 2022

What Makes Crypto Prices Go Up

What Are The Prices Of Ethereum Shiba Inu And Cardano Today

What Makes the Price of Cryptocurrency Go Up?

With cryptocurrencies often moving in tandem with Bitcoin, Ethereum, the cryptocurrency synonymous with the rising crypto trend of NFTs, was trading down more than 7% on Tuesday after hitting a new record high of almost $5,000 last week.

Ethereums price was fluctuating at around $4,316.19 at 2.30pm on Tuesday down from $4,842.54 at 6am on 9 November.

The hype surrounding popular memecoin Dogecoin had appeared to diminish recently as new altcoins took centre stage.

Shiba Inu coin is trading up at approximately $0.00005060 as of 2.30pm today after smashing through multiple record highs in late October.

Dogecoin, meanwhile, was trading down by approximately 6.5% on the last 24 hours at $0.24 on Tuesday afternoon.

Meanwhile, Cardano prices are fluctuating around $1.93 in a 6% fall on the last 24 hours, XRP was down 7% at $1.11 and Solana at $226.32 as of 2.35pm on Tuesday.

How Does Cryptocurrency Value Increase

Cryptocurrency is becoming an increasingly popular form of payment, with Bitcoin being the most well-known.

One question that many people have about Crypto coins Bitcoin specifically, how does it go up in value?

There are a few different factors that can contribute to how much cryptocurrency goes up in value.

And how valuable they are.

In this blog post, we will look at what makes cryptocurrency increase or decrease in value and how you might be able to make your own investing and trading decisions.

The value of cryptocurrency is determined based on how much people want it, how rare it is, how easy it is to mine , how many sellers there are for the currency, and how willing buyers are to purchase it.

Lets dig in deeper.

6 Conditions That Determines the Value of Cryptocurrency

Here are possible reasons why cryptocurrencies go up and down in value:

Why Does Bitcoin Have Such A Big Influence On Other Cryptocurrencies

By entering the current bull run, the cryptocurrency market has shown investors all over the globe that it can stand the test of time. People have regained their trust in crypto and are seeking to buy bitcoin with credit card to participate in the financial revolution.

Investors are often looking at alternate cryptocurrencies to make considerable profits by trading in and out of them. However, aspiring traders and investors should always be aware that the market heavily depends on one cryptocurrency Bitcoin.

In this article, we will explain why Bitcoin has so much influence on other cryptos. To achieve this we explore its basics and some major events that helped it reach a value over 1 trillion dollars in just over a decade.

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Its Basic Supply And Demand

Lets take the most popular crypto as an example: Bitcoin. To understand how bitcoin is valued, you have to understand the law of supply and demand. The supply and demand of Bitcoin play a big factor in the prices. Currently, there is supposedly a cap of 21 million Bitcoins. When that cap is reached, Bitcoin Mining will no longer create new Bitcoins. The supply of Bitcoin has reached 16.8 million in January of 2017, meaning that around 80% of the total amount of Bitcoin has already been mined and made available to the public. As we all know in general economics, the price goes up when the demand cannot keep up with the supply.

There are two types of factors that can affect this: Internal factors and External factors.

Should I Invest In Cryptocurrency

What Makes Crypto Go Up And Down

People invest at their own risk and cryptocurrencies are not regulated by British financial authorities.

All crypto investments are risky, but meme coins like Shiba Inu are particularly volatile, and you should be prepared to lose everything you invest.

The Financial Conduct Authority warned in January: Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors money.

If consumers invest in these types of product, they should be prepared to lose all their money.

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What Is Bitcoins Price

When talking about Bitcoins price, people are usually referring to either the USD price on a leading exchange or a composite price made from the average of multiple exchanges prices .

When people talk about the price on a certain exchange, they mean the price of the last transaction made on that specific exchange.

So for example, if the price of Bitcoin on Bitstamp is $10,000, this means that the last trade made on Bitstamp was closed at $10,000. Once a new trade is conducted, the price will be updated accordingly.

As Bitcoin is a decentralized asset that trades on many exchanges and between countless individuals around the world, there is, in fact, no singular Bitcoin price.

Each exchange has its own price for Bitcoin, although these prices are usually quite similar. This opens the door to arbitrage opportunities for experienced traders with enough capital .

How Does Bitcoin Increase In Value

As bitcoin nears its maximum limit, demand for it increases. The increased demand and limited supply push the price per bitcoin upward. Also, more institutions are investing in bitcoin and accepting it as a form of payment, thereby increasing its utility and making it a preferred medium of exchange among consumers.

Bitcoin is relatively safe due to cryptography and robust protocols and readily available through several exchanges. Also, you need not purchase a full bitcoin to have ownership of it. Fractional shares are available, increasing its attractiveness and value.

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Top 4 Reasons Why Bitcoin Can Influence The Entire Crypto Market

If you have been following the cryptocurrency market, you might have noticed by now that every time Bitcoins price goes down, alternative cryptocurrency prices follow. The opposite is equally true when the price of bitcoin rallies, we expect altcoins to go up in price shortly after.

But why does this happen? What makes Bitcoin so important that an entire industry follows it so closely? If we made the parallel to stock markets, it would be ludicrous to think that all of the Nasdaq would crash just because of Microsoft stocks, for instance.

How Does Bitcoin Make Money

Is the Bitcoin ETF Actually Gonna Make Price Go Up? – Crypto News

Unlike stock, bitcoin does not represent ownership in a company or entity. Owning bitcoin is owning digital currency, much like owning US$1 is owning paper currency. Bitcoin miners earn rewards for completing blocks of verified transactions, and owners of bitcoin make money as the price per coin increases. For example, if you purchased 100 coins at $65.52 on July 5, 2013 and held it until its all-time high of $61,683.86 on March 13, 2021, you would have $6,168,386.

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Reasons For The Downtrend

In the spring of 2021, Elon Musks tweets about the centralization of bitcoin and the ban on supporting the cryptocurrency business in the PRC became one of the main reasons for the fall of the first cryptocurrency up to the level of $30,000.

Elon Musks Tweets

The prerequisites for the fall of the cryptocurrency market arise from Teslas refusal to accept payments in bitcoin and rumors about the possible sale of a coin from the companys assets.

Elon Musks actions disappointed investors, as the hopes for Bitcoins entry into the world of large multinational companies have not yet come true. The bearish sentiment of market participants was exacerbated by the news that support for cryptocurrency-related businesses was banned in China.

Mining Ban In China

The PRC has a huge mining capacity and a large share of the e-commerce market, which is targeted by cryptocurrencies. The market fears that following China, a ban could be introduced in other countries.

According to experts, the fall was due to the general disappointment of investors in the dynamics of cryptocurrencies, and Musks tweets and the PRCs bans fell into fertile soil.

However, by today, bitcoin corrected to $51,000.

Bitcoin Price Crash Explained

At this stage, there doesnt appear to be one single reason for this mini price crash, with several factors potentially coming into play. There was the rejection by the SEC of the spot bitcoin ETF at the end of last week, though that had little market impact at the time and there are several more in the pipeline.

China has also tightened restrictions on crypto mining, though the crackdown earlier this year means the number of operations left in the country are negligible.

Finally, there is the possibility that long-term holders are taking the opportunity of the recent all-time high to skim off profits from their stash. A falling price also brings out the panic sellers, who are typically new to cryptocurrency investing and more prone to being spooked by sudden market movements.

Bitcoin has plunged by over 6 per cent in the last 24 hours as the overall crypto market has lost over 7 per cent of its value in the last day.

The price of several leading cryptocurrencies including bitcoin, ethereum, solana, and cardano have plunged by 6 to 8 per cent in the last day, with the global crypto market valued at about $2.65 trillion.

Meme coins dogecoin and its spinoff shiba inu have also dropped in value by over 5 per cent in the last 24 hours.

The chart is all red with no signs of recovery yet.

Prices of cryptocurrencies over last 24 hours

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Is Bitcoin Better Than Gold

Following the comments from MicroStrategy CEO Michael Saylor yesterday that bitcoin is better than gold, weve had some reaction from analysts both reasserting and refuting the claim.

In the latter camp is Jai Bifulco from the Kinesis Money platform, which uses precious metals like gold and silver as the basis for digital currencies.

Heres what he had to say:

Bitcoin should not be likened to gold. They remain very different, and bitcoin is not a proven hedge against inflation. Unlike gold, the price of bitcoin is extremely volatile, as it has demonstrated many times in its brief history. Cryptocurrency bull runs are indeed tempting, but they are very unpredictable and suggesting bitcoin is like gold gives investors a false sense of security.

Gold is the universal constant and, relative to weakening fiat currencies, it will do what it always has done as a stable and enduring store of value, hedge against inflation and currency devaluation.

Bitcoin Has The Most Secure Network

What Makes Crypto Go Up And Down

Bitcoin is based on a proof-of-work mechanism that is ensured by more than 18 million miners participating in Bitcoins decentralized network, the blockchain.

This volume of participants has an effect of a high level of decentralization of the network, ensuring flawless security of the Bitcoin payments system.

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B Utility And Difficulty Level

Utility is a significant factor in the development, advancement and the fall of any asset and cryptocurrency isnt exempted from this reality. In the event that it isnt utilized and appropriately used, it would have almost no apparent worth. For Bitcoin, the utility is high, its abnormal state of trouble and vitality utilization gives it a sensible cost and all things considered is reasonable for the venture and changes in this utility level can make the cost vary.

Why Are Cryptocurrencies So Popular

Cryptocurrencies appeal to their supporters for a variety of reasons. Here are some of the most popular:

  • Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to buy them now, presumably before they become more valuable

  • Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation

  • Other supporters like the technology behind cryptocurrencies, the blockchain, because its a decentralized processing and recording system and can be more secure than traditional payment systems

  • Some speculators like cryptocurrencies because theyre going up in value and have no interest in the currencies long-term acceptance as a way to move money

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What Determines The Value Of A Cryptocurrency

The technology behind a cryptocurrency plays a very big role. Decentralised currencies are resistant to censorship but even more so, it is nearly impossible to just shut them down.

Another important part of the technology is its safety. The digital nature of cryptocurrencies implies that there could be bugs in the coding. For example, an ethereum-based smart contract for a democratic digital investment fund, the so-called DAO, had a bug that was ultimately exploited by a hacker who stole more than $30M worth of ether. To fix this issue, a change in the ether blockchain was discussed. Some in the Ethereum community agreed that it would fix the problem, but others didnt want to change the code as a matter of principle and were afraid it would affect the credibility of ether. Ethereum was then split into two versions: Ethereum and Ethereum Classic . Both can still be traded and everyone who owned ether at that point received a version of the new one and the classic one. Such an event is called fork and can have a big impact on the price if there is no consensus between the miners and other participants in the network.

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Announcement And Upcoming Events

What makes Bitcoin and other CryptoCurrencies go up in value?

Demand can go up because of an announcement that a company is going to accept crypto payments, or because people are speculating on its future value.

For example:

An example of how a company accepting crypto payments would affect demand:

If Company a accepts Bitcoin as payment, then later announces that they will stop accepting Bitcoin for purchases due to the volatility in the market, people who were holding Bitcoins may sell them off.

This happened not too long ago when Elon Musk started accepting BItcoin in his company we all saw how Bitcoin projected afterward.

A similar thing happened when he started pushing DOGE coin.

Months on, he later tweeted that Tesla would no longer accept bitcoin as payment due to environmental concerns about its heavy energy use. This caused a significant drop in the value of Bitcoin.

Another example:

Is when a coin is to get listed on a popular cryptocurrency exchange like Binance or Coinbase.

Getting a coin or a token listed on an exchange like Binance is a big deal because it gives the coin or token instant credibility. Hence drives its value up.

Monitor any new coin or token listed on popular exchanges, youll notice a huge surge in its value.

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Why Is Bitcoin Valuable How Does Cryptocurrency Have

  • How does cryptocurrency gain value? This is one of the overarching questions that most, if not all, digital currency fanatics ask themselves. To answer this question, you first need to know that cryptos are volatile
  • Article Overview: This is the second of a 3-part series that takes a look at the evolution of cryptocurrency and the problem with money today. The 1st part of this series of articles addresses the multiple failures of money today, while the 2nd part explains what is cryptocurrency and how it addresses these issues and rectify them. Part 3 is an inside look at the strengths of cryptocurrencies.
  • You can buy a fraction of a coin, which makes getting started easier. Also, most exchanges charge fewer fees if you are using one form of cryptocurrency to buy another form
  • Better still, more cryptocurrencies seem to be popping up all the time, contributing to the more than $370 billion in net worth that they now share. And if bitcoin is the only cryptocurrency that you’re familiar with, there’s a good reason for that รข of that $370 billion, roughly $210 billion belongs to bitcoin. 2
  • Increased Regulation In 2021

    The rise in the popularity of cryptocurrencies and their adoption by financial institutions has led some governments to assess whether regulation is needed to protect users. The Financial Action Task Force has defined cryptocurrency-related services as “virtual asset service providers” and recommended that they be regulated with the same money laundering and know your customer requirements as financial institutions.

    The European Commission published a digital finance strategy in September 2020. This included a draft regulation on Markets in Crypto-Assets , which aimed to provide a comprehensive regulatory framework for digital assets in the EU.

    On June 10, 2021, The Basel Committee on Banking Supervision proposed that banks that held cryptocurrency assets must set aside capital to cover all potential losses. For instance, if a bank were to hold bitcoin worth $2 billion, it would be required to set aside enough capital to cover the entire $2 billion. This is a more extreme standard than banks are usually held to when it comes to other assets. However, this is a proposal and not a regulation.

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    What Makes Crypto Go Up And Down

    The main reason for the fall in the cryptocurrency market is the famous traders adage trees dont grow to the sky. Any trend cannot last forever: the euphoria of growth is always replaced by the depression of the fall.

    The term hype means excitement, intrusive advertising, hype, information hysteria. This word should not be confused with the consonant term HYIP investments with a high level of risk.

    In the wake of the growth of cryptocurrencies, millions of new investors, inexperienced in exchange speculation, have entered the market. Figures and profit percentages began to overshadow the mind: people who yesterday did not know anything about the financial markets, carried their money to this new and poorly regulated market. A very high price had to be paid for this.

    Examples of a fall in the cryptocurrency market show the importance of the psychological preparation of the investor and the presence of an investment plan. The latter is even more important than psychology. If you believe in the cryptocurrency market and expect its further growth, then even a drop of almost three times is not a reason for disappointment. A fall in the asset market is a great opportunity to enter the market at a cheap price. It is important for an investor to make such an entry on an ongoing basis.

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