Why do cryptocurrencies have value?
Cryptocurrencies are a brand new way of investing money, and they have been able to attract a lot of people. All the cryptocurrencies such as Bitcoin, Ethereum, Cardano, and many others start with less than a dollar, and now they are so valuable.
For example, Bitcoin had 0.5 in 2009, and now it cost about 50.000 dollars each. Although cryptocurrencies are popular and nowadays, many people are involved in them. But if someone asks them why cryptocurrencies have value? They probably don’t have any unique ideas. So as Bryan Routledge said, Bitcoin has value “because people think it does.”
We say a currency can be used when it has value, or in other words, can be counted on with confidence that it retains its value over time and does not fall. Historically, goods and precious metals were used for payment in many societies because they were thought to have a fixed value.
After that, communities eventually turned to minted coins. Again, the reason these currencies were usable was to ensure their value. In the modern world, minted currencies have taken paper money that does not have the true value of coins and precious metals.
By changing payment ways during history, it wasn’t unpredictable that we would have electronic currencies one day. The currencies used are representations of coins or banknotes that indicate a certain amount of a commodity.
Therefore, cryptocurrencies are valuable because they are divisible, easy to use, transferability and rarity. But what are the reasons for increasing a cryptocurrency price?
Understanding those reasons might be the difference between winning or losing in the crypto world. And using tools like Bitcode Method, an automated trading platform that offers a seamless way for beginner and experienced traders alike, will help them make profits in the crypto market.
Reasons for increasing a cryptocurrency value
As we said, all the cryptocurrencies have less than a dollar value, but they get more and more valuable over time. The main reason for increasing any currency’s value is increasing the market’s supply and demand. It is quite clear that when the demand for a currency increases, its price also goes up.
But what increases the supply and demand for a cryptocurrency? To answer this question, we can point out many reasons that directly or indirectly affect the value of a cryptocurrency. Here we point out some direct reasons for increasing prices:
Currencies road map
A currency needs to know its final goal. Before starting a currency project, the team is behind it; specify the road map. So the people who want to invest in this can find the currency’s potential, and then they can check out if the currency is worth investing in or not.
It seems by improving the Bitcoin market and other cryptos, all the currencies will reach their goals and would go even higher, but, in fact, this thought is not true! The Crypto market is full of unexpected events, and if the crypto network and its team weren’t good enough, the currency might fall and be deleted from the market.
Project thinking room
The stronger a team is, the more valuable it is! We can call a currency powerful when its team is big and expert. Probably the currency team is the most important thing about investing because when the team behind a currency is powerful, investors can trust them easily and be sure that they would not lose all of their money because of Scams or unpredictable events.
Project thinking room is the place that can fight and defend cryptocurrency againstand other issues. As a result, investors usually choose well-known cryptocurrencies that have a powerful background team. So if the team were a newcomer or unknown, it could be dangerous for people’s money.
Being a sub-branch of big currencies
As we said, some powerful teams own huge cryptocurrencies like Bitcoin, Ethereum, Bitcoin, Ripple, Tether, Binance coin, and… . these coins own a large part of the crypto market, and most of the other currencies are these sub-branches.
Being a sub-branch of high-rank crypto means little coins start their project on the network of the big currencies. For example, Chain link is a crypto-based on Ethereum, released in 2019, and now it costs about 26 dollars. Therefore, being a high-rank currency sub-branches means this currency has a good potential for increasing, and investors can predict a good future for it.
Trading volume per day
The trading volume represents the total number of buyers and sellers who trade in a given period, usually one day. The higher the trading volume, the more active the currency is, so we can find out if the cryptocurrency will increase or decrease by checking its trading volume.
If trading volume increase in a day, it shows the buyers are more than sellers, so the crypto price will be bullish or increase. The other thing is that when trading volume is high for crypto, traders will notice this currency is getting popular and more people will buy it.
One of the most effective things that can increase a currency price over a night is positive news about it. The positive news is like starting a contract with a company, joining a big investor like famous people, or adding more value during the time.
This news will be published on social media, and many people will join after that, so now the crypto experience two positive waves and is followed by a bullish day for crypto.
For the last part, we should notice that most of the market is influenced by high-rank coins like Bitcoin or Ethereum, which means they can make a bullish or bearish market. So, first of all, monitor major currency changes and then analyze the Intended cryptocurrency by charts.
Founder Dinis Guarda
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