In the view of many ordinary people, cryptocurrencies remain something ephemeral and unreliable. In particular, it could be unclear what affects their value and whether it is possible to predict their price in the future.
Cryptocurrency prices mainly depend on how valuable consumers consider them. However, there are also objective factors affecting their worth. Let’s analyze what affects cryptocurrency prices and what causes cryptocurrency prices to rise and fall.
Prices on cryptocurrency exchanges are formed by a simple rule: the ratio of supply and demand. While there is a demand, the price rises. Next comes the price correction. Since there is no more demand, the price drops until demand reappears. However, what are the fundamental reasons that affect demand and thus prices?
Positive attitude of society to cryptocurrency
Public opinion has a huge impact on the cost of the currency. After all, current cryptocurrency prices are largely determined by the confidence of consumers. What can positively affect the growth of cryptocurrency prices in the eyes of the public? First, a crypt is an innovative tool that has certain advantages in comparison with traditional currencies. Therefore, it attracts the attention of consumers who are interested in everything new and promising.
Such technical improvements as the use of many signatures and the development of new options to pay online can contribute to the credibility of the currency. Also, the rapid growth rate of popular cryptocurrencies, such as Bitcoin, pushes many people to invest in such currencies.
Negative attitude of society
On the other hand, the negative attitude of society towards cryptocurrencies may be due to the fact that in the public opinion they are linked to illegal activities. Another factor that can negatively influence public attitudes towards cryptocurrencies is hacker intrusions into big cryptocurrency exchange.
This is one of the key factors affecting the cost of cryptocurrency including bitcoin price. New coins are emitted at a constant speed, regardless of demand. In some cryptocurrencies release of new coins is not provided. Thus, the supply is strictly limited. In such circumstances he higher the demand, the higher the price of cryptocurrency.
Cryptocurrency rates depend on each other. Especially the Bitcoin rate affects the situation, since this currency is the undisputed leader. When the rate of Bitcoin is growing, cryptocurrency prices are rising. And vice versa.
In general, global trends show that confidence in cryptocurrencies is growing which means that they have great potential. But only predicting cryptocurrency prices with deep learning and analyzing all listed factors can reveal a real potential of each crypto.
As for the predicting the rate of cryptocurrency, experts agree that it is very difficult to do this. Analysts can not precisely calculate the actual rate, as it depends on the speculative market expectations and information background. However, if you take into account all factors affecting the cost of cryptocurrency, you can at least assume how promising and reliable it is.