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What Are The Critical Factors That Affect Cryptocurrencies And Their Value: Explained

Author: Coinpedia

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Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

    Cryptocurrencies have made great strides in technical progress and success after their early notoriety as havens for terrorists and corrupt officials. In 2018, the market capitalization of cryptocurrencies was expected to rise to $1-2 trillion. The software that underpins cryptocurrencies is claimed to have a wide range of uses, spanning from education to media.

    Investing In Cryptocurrency Is A Smart Opportunity To Diversify The Portfolio:

    Since, as previously said, Cryptocurrency seems to have no inherent value, why is there such a big deal about it? There are two main explanations for why people invest in cryptocurrencies; First, cryptocurrency prices have a speculation component that attracts investors seeking to benefit from market fluctuations. E.g., as the Ether sector becomes more positive, the value of Ether grew from $8 per unit throughout January 2017 to approximately $400 per unit 6 months later, only to collapse to $200 per unit throughout July due to a problem.

    Many people engage in Cryptocurrency as a geopolitical shield, in addition to idle fantasy. The value of Bitcoin continues to rise through periods of political instability. In 2015 and 2016, as the political situation escalated in Brazil, Bitcoin exchange trading increased by 322 percent, while wallet sensory experience by 461 percent. Bitcoin values rose in reaction to Trump’s and Brexit’s wins and have continued to rise as Trump’s political scandals have intensified. If you want to earn consistent and solid profits every week, then you should register yourself on the Bitcoin Aussie System, so go over there now.

    Cryptocurrency Prices And The Factors Affecting Them:

    It’s just about market forces. The Bitcoin blockchain contains code that limits the availability of Cryptocurrency. The growth pace in the Bitcoin inventory slows before the total amount of Bitcoins approaches 21 million, which is anticipated in the year 2140. The increasing growth in the number of Bitcoins almost guarantees that the value of Bitcoin would continue to rise as Bitcoin acceptance grows.

    Litecoin’s availability would be reduced to 84 million units. In comparison to state currencies, the cap aims to have more stability in the monetary policy. Since the main currencies are built on open source technology, anybody may evaluate the availability of Cryptocurrency and make an educated decision about its worth.

    Cryptocurrency has a wide range of applications. To have some meaning, a cryptocurrency needs a use scenario. If an uncommon metal is used, for instance, over the next iPhone 8, a miner could see a rapid increase in value; if the material has not been used, though, it becomes useless. Cryptocurrencies are subject to the same process. Bitcoin has utility as a medium of exchange; alternative cryptocurrencies, such as Ether, will either build on the Bitcoin concept or provide a different use case that generates value. When the number of people that use cryptocurrencies grows, so do interest and valuation.

    Changes in Regulations Since cryptocurrency legislation is yet to be decided, Cryptocurrency’s valuation is heavily affected by perceptions of potential regulation. In a worst-case situation, the US government might ban people from possessing cryptocurrencies, equivalent to how gold was banned in the 1930s in the US. Although control of cryptocurrencies may change overseas under such a situation, their worth would be severely harmed.

    Technology evolves. Unlike physical goods, technological advancements affect cryptocurrency rates. The price of Bitcoin was adversely affected in July and August 2017 by debate about changing the fundamental infrastructure to increase transfer times. Bitcoin’s price soared since the move was implemented, rising from $2700 to a new peak of $4000 in just two weeks. News stories of hacks, on the other hand, often result in price reductions.

    Nonetheless, considering the temporary existence of this phenomenon, there is a possibility of a collision. Many analysts believe that institutional buyers will be the ones to lose the most if the blockchain bubble crashed. “For now, a substantial reduction in the market cap of cryptocurrencies will be only a ripple through the business corporation, still too tiny to disrupt equilibrium or impact the ability to repay of lenders we rate,” says Mohamed Damak, S&P Global Rating sector lead.

    Imagine an election where, instead of a centralized government agency’s machine, hundreds of applications connected in an open software network validate vote counts. Or, in the case of real estate, where the conversion of a cryptocurrency supported by a smart contract is all that is needed instead of signed contracts or an official “closing.” Your creativity is the one thing that holds you down.

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    Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

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