[Crypto] 4 Factors Influencing Bitcoin Prices
Crypto is like a stock or commodity that is an investment instrument with volatile value and cannot be predicted when the price rises or falls.
For traders or investors, learning about what factors can affect the volatile price of crypto is studied.
Supply &Demand
The price of crypto assets depends on their demand and availability in the cryptocurrency market.
If Bitcoin's interest in the crypto market rises beyond the seller's Bitcoin supply, the price will go up.
If Bitcoin's interest in the crypto market falls, it means that many sell rather than buy Bitcoin, the price will drop.
Utility
Crypto is often used in everyday life, the price will go up. If crypto is not used as a modern currency the price will drop.
Ethereum blockchain transactions require Ether as a gas tax which is later to pay the Ethereum Miner.
Due to the increasing use of the DeFi project, the need for ETH also increased which will cause ether prices to rise in the crypto market.
Market Cap
Market Cap of a crypto becomes the next factor, the price per coin will be multiplied by the amount of crypto available in a market. Prices (MarketCap) such as Bitcoin will be stable unlike DeFi tokens.
Today, 18 million BTC has been mined by miners. Unit price $20,000/BTC.
So, the total Bitcoin market is 18,000,000 X 20,000 = $360,000,000,000 USD. And other tokens cost definitely less than Bitcoin, in other words the movement of other tokens is much faster than the price of BTC.
You can use the Coingecko website to view Market Cap Token data.
StableCoin
Stablecoin prices always follow the price of the asset that is backing the stablecoin.
Tether is a stablecoin type with USD. This means that USD Token will always follow the price of US Dollars.
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