What Influence Cryptocurrency Price?

By mummyrio | SIDECHAINNEWS | 31 Aug 2020


Thousands cryptocurrencies exist today. Hundreds of exchangers are now created. However, there are many exchangers that have low volume trading. There are not enough demand from cryptotrading on low volume transaction. Big exchangers still earn profit from trading fees like binance, bittrex, indodax , huobi and other big ones. New dex and centralized trading platform created with releasing their tokens. They offer low fee rates to trade with their tokens. Do they make succesful to increase trading volume or increase the value of their tokens? Cryptocurrency price is affected by some factors. These 5 factors have strong influence to cryptocurrency price. 

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Pic : https://pixabay.com/id/photos/cryptocurrency-koin-blockchain-uang-3409724/

  1. Security
    Security in cryptocurrency still a big issue. Since there are many exchangers are hacked and stolen, investors become reluactant to invest in cryptocurrencies. A news about hacking will influence the price of cryptocurrencies in general. Market will reacts to negative sentiment. That will cause the price will be corrected and dumped.

  2. Regulation
    Regulation in a country is very important. Some countries still apply strict regulation of using cryptocurrencies. In my country, cryptocurrencies are illegal if they are used as payment system. The regulation acts cryptocurrencies digital properties. They are tradable to our national currency but we are not allowed to buy products and services with cryptocurrency payment. Adoption to cryptocurrencies are good news and regulation that will have positive sentiment to market.

  3. Speculation
    This factor is not only in cryptocurrency market but also in stock market. There are big speculants in cryptocurrency. They are called whales. Whales will dominate the market. They will play the market to make their own profit.

  4. Political and economic situation
    This issue has no straight relation to cryptocurrency but when political and economic situation become worse, market will react and find secure investment to store their asset. Cryptocurrencies will be choice to secure asset from bank runs.
    Before cryptocurrency, people tend to choose gold to secure their asset, now cryptocurrencies become alternatives.

  5. Hardfork and new currency launching
    Hardfork news will alert speculant to play the new coins. As it happened to Hive. In the early weeks, the price of hive reached 0.99 USD. That was the highest price of Hive as a new coin. Launching new coins also attracts traders to make profit from the volatility of the new coins in the market. New coins have low marketcap. The lower market cap, the more volatile of the coin

Bitcoin is the largerst marketcap. Bitcoin seems to be more stable now. To make profit, traders like to play coins with low market cap though they have higher risks.

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mummyrio
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