If you are willing to taste the cryptocurrency space and the profit, you must know about the fluctuations. Yes, the prices of cryptocurrencies fluctuate more than anything else, and it is something that makes them profitable. Recently, people thought that the government controls the prices of bitcoins. Also, without the involvement of any authorities in the prices of cryptocurrencies, they cannot be regulated. However, it is expected to see regulations in the prices of cryptocurrencies in the future, but now, it’s a far cry. If you are interested in bitcoin trading, check if bitcoin is a backed currency .
Every crypto trader has to pay complete attention to is none other than the prices of cryptocurrencies. Primarily, we can say that everyone must pay attention to the prices of bitcoins because it is the leader of the market. Therefore, when the prices of bitcoins fluctuate, others follow. But, apart from this, you should also know about the factors that can lead to fluctuations in crypto prices. A few of them are mentioned here.
- Node count
It is an essential characteristic for anyone to judge the value of cryptocurrencies in the future because it tells you a lot of things. With the help of this sector, it is easy for anyone to check the existing number of wallets on one network. Also, you can see this information very quickly on the internet by doing a Google search. You can check the homepage of the cryptocurrency, and everything is in front of you. First of all, it tells you about the strength of the community. The stronger the community, the higher are chances of value hike. Secondly, it also tells you about the decentralization of the network. The more decentralized, the higher will be the chances of growth.
- Production cost
The cost of production for any commodity directly influences the prices. As the prices of anything increase, the production cost could be a significant reason behind the scene. So, if you see the increase in prices of any cryptocurrency in the market, you can certainly assume that it might have happened because of the cost of production. Therefore, we can say that the cost of production can be directly related to the prices of anything in the market. The prices go higher whenever the cost is increased. Also, the prices decrease when the company lowers the cost of production. Also, it depends on the company if it wants to increase or decrease the price of a commodity.
Suppose that the cryptocurrency exchanges are also linked to their popularity feature, and therefore, this thing will influence the price of a commodity in the market. You can certainly consider that cryptocurrency exchanges that are very popular in the market, providing you with particular crypto will make it popular. If a coin is not available on the most popular cryptocurrency exchange of the world, it will not be purchased by more people, and therefore, there are chances that it will fail. Therefore, we can say that cryptocurrency prices can be partially related to cryptocurrency exchanges. For the popular ones, if a coin is available, it is a good one, and people will be willing to purchase it.
The competition in the market can be a critical hindrance to the increase in the prices of a cryptocurrency. Yes, whenever there is very high competition in the market, a cryptocurrency company may lower the prices to be more willing to purchase the coin. However, if the competition is lower, a cryptocurrency can decide to increase the prices because they know that people have no choice but to buy their points without competition. The situation is entirely in the control of the owner of the coin.
Regulations from the different governments of the world can be a particular factor in deciding cryptocurrency prices. For example, whenever there is a fluctuation in the value of bitcoin, we can consider a statement made by the country. And the government says that it will regulate the cryptocurrencies; people sell off their crypto holdings, leading to a crash in the market. However, if the government decides to stay in favor of the growth of crypto coins, people invest more, increasing the prices of crypto coins.