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- What influences the growth and decline of cryptocurrency prices?
- Predictions for 2018. What to expect from the market?
Every asset in the world (dollar and Bitcoin as well) is constantly changing in value, they differ only in the level of volatility. All exchanges (not just cryptocurrency ones) conduct trades with various assets, and the main indicator for their price is the ratio of supply and demand. The law of price formation is quite simple: “With each new purchase of an asset its price goes up, and with each sale it goes down.” If people who buy are more numerous than those who sell, it means that the rate will rise and vice versa. There are a lot of reasons for the formation of demand and supply:
- Behavior of whales (large-scale players) who possess such capital, which makes it possible to turn the market into any desired direction.
- Panic or euphoria, which are directly related to the fluctuation charts.
- News background, which, in fact, influences the mood of most investors.
- Other fundamental reasons of a single nature. For example, the launch of such a revolutionary technology as smart contracts gave the industry a second wind.
At this point in time, there is a direct correlation between the movements of Bitcoin price and the entire market as a whole, it can be seen even on the daily chart. That is, wherever BTC goes, altcoins follow.
Even the most professional experts of the industry are afraid to give any accurate forecasts on the development of cryptocurrencies and their value. At this point in time, the market is still too young and prone to excessive volatility, so no one can give an accurate prediction.
You can find a huge number of “real” predictions on the Internet from various kinds of “analysts”, but you should not believe all these articles. If you want to earn money on the cryptocurrency market, you need to learn how to look through tons of information garbage before you get to something valuable.
In this article, we will not be reading tea leaves. We will discuss the forecasts for the development of the top-2 cryptocurrencies. Of course, we could use our imaginaton and write about the growth of some young promising cryptocurrency by 100 times, but maybe next time/
As the overwhelming majority of analysts believe, Bitcoin will stay at the top of the cryptocurrency hierarchy in the nearest future. This is evidenced by the increased demand for coins both among ordinary investors and among the governments of the world’s largest countries. Also, do not forget about the limited emission of this coin. In total, 21 million pieces will be produced. Due to the specially built algorithm of reducing the reward for the block found and complicating the overall complexity of the network, it is not going to happen soon. At the moment, a bit more than 17 million coins have been mined, and about 4 million are considered lost forever. By simple mathematical calculations we get a number equal to 13 million coins, which is now available in everyday life. On a global scale, it will be absolutely not enough to satisfy the needs of everyobdy, so the coin price will have to grow substantially.
Given that now the market is dominated by a deep correction with elements of depression, talking about significant growth in the nearest future is quite pointless. But if you consider the current situation on the market in a bigger scale, it becomes obvious that this is just another phase which can not last forever. If we analyze the more or less adequate forecasts of analysts and come up with the possible average rate for the end of 2018, this number might be about $14-15k per coin.
This coin is backed up by the revolutionary technology of smart contracts and the platform with the same name, where you can create your own blockchain applications. The vast majority of ICOs are conducted on the Ethereum platform, the total number of startups has exceeded 1000 in the course of the project.
Recently, the ICO market has begun to develop in leaps and bounds, which will certainly affect the cost of Ethereum. But you should not expect the price of ETH to be 20k dollars, like Bitcoin’s. This will be impossible due to the total number of coins, which has already exceeded 100 million pieces. So far, the emission of Ethereum is unlimited, but the developers are thinking about soft fork and the implementation of the new PoS algorithm, which will reduce the inflation of the coin by 20 times.
According to our editorial board, the average rate of Ethereum by the end of 2018 may possibly reach $1300-$1500. Thus, the coin has every chance to become the first in terms of capitalization, shifting the mighty Bitcoin.
The fluctuations in the exchange rate of any type of cryptocurrency (and other assets in general) are affected by the supply-demand relationship. These indicators are influenced by many factors (psychology, news background, global events, etc.).
The market has been showing a downward trend for a long time, but if you look at the situation more broadly, you can see that this is just another phase of it. In the global sense, cryptocurrency has all the chances to grow tens and hundreds of times, compared with today’s indicators.
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