Wondering what influence the price of cryptocurrency in the digital market?
I'll make this post shorter i mean who like to read long articles with hundreds of paragraph? So lets get started.
(1). popularity of the asset
One of the major factor affecting the price of cryptocurrency is their popularity. Obviously bitcoin is the most popular and valuable cryptocurrency in the world because it is popular people know cryptocurrency with bitcoin name. There are various other coins which are really good but their price don't increase like Bitcoin does (DOGE) the reason behind their price doesn't rise is these coins are still anonymous to the crypto users.
Popularity of the asset can drive up the price of the crypto currency
(2).Demand and supply factors
I Assume we all already know that when the demand for crypto is low the prices also go down similarly when the demand is high the prices go high when individuals, government and multinational corporations adopts cryptocurrency it is an indication that prices are going to be real high... So Keep yourself active and watch for such updates in the cryptoworld. It can get you larger profits a day.
(3). Cryptocurrency's Regulations(legality)
The legality of the asset can also affect the price of the cryptocurrency. Crypto has experienced a rapid acceleration and with this growth the governments has started to focus more on crypto.
Governements are now taking note of money laundering, terrorism financing and other criminal activities that can be linked with cryptocurrencies.
There is a report saying among 126 countries, 67% of them consider Bitcoin as legal. while 19% of them remain neutral. While On the other hand only 8% the 126 countries deem Bitcoin illegal. The response from regulatory bodies can cause the value of cryptocurrency to go up or down.
(4). Mining
It is a big factor that can also influence the price of cryptocurrency. Mining is the process of validating transactions and adding them onto the blockchain. Bitcoin has a fixed amount of 21 Million. On every 210k block the bitcoin halving reward is reduced to half. Bitcoin halving makes a huge impact on the mining industry. If the prices go less lower the miners will leave the mining industry because it won't be profitable to them.
it also may not be as profitable as it used to be. This is because there are already several mining pools that are dedicated to mining the remaining bitcoin and the more miners there are, the more difficult it is to mine, resulting in a higher price for bitcoin.
(5). Utility of the assets
A cryptocurrency should have a strong use case in order to incentivize people to hold the coins. Every cryptocurrency has a use (such as bitcoin and ethererum). If a coin serves no purpose, it is more likely to have a lower price. Bitcoin’s purpose is to be a peer-to-peer cashless system that could utilize complete digital money. Ethereum allows people to create their own decentralized applications. If a cryptocurrency has no practical use, it will probably reflect on its price on the market.
ethererum
For executing the commands and developing applications on the Ethereum blockchain you would need to have ETH to convert into gas and represent the ‘fuel’ of Ethereum.
Hence, the more the people who execute transactions and develop applications the more would be the demand for ETH and greater would be the prices.
The bigger role of cryptocurrencies, the greater would be the cryptocurrency market cap