Top 7 Factors That Affect The Prices of Cryptocurrencies

Cryptocurrencies are digital assets that are used as a form of payment on the internet. They can be traded and exchanged for other cryptocurrencies, or they can be exchanged for fiat currencies like US dollars. Cryptocurrencies are decentralized, meaning they have no single governing body that controls them. They are also anonymous as there is no need to provide any personal information when creating an account.


The factors that affect crypto-currency prices include market sentiment, market capitalization, supply and demand, media coverage, technical issues with the cryptocurrency network, regulatory issues with the cryptocurrency network, and competition from new cryptocurrencies.

Cryptocurrency is a digital or virtual currency that uses cryptography for security. The first cryptocurrency to created was Bitcoin back in 2009. Today there are over 2000 different types of cryptocurrencies, with more created all the time.

The value of a cryptocurrency are determine by its usefulness and demand. It not determined by how much it costs to produce like traditional currencies. Cryptocurrencies can trade on exchanges, which have the potential for huge price fluctuations in a very short space of time.

Investor Sentiment and Economic Events

Investor sentiment and economic events are the two major factors that affect the price of Bitcoin.

In this section, we will discuss what are these factors and how they affect the price of Bitcoin.

Investors’ sentiment is a general feeling among investors about the future prospects of an asset or market. When investor sentiment is positive, it means that investors believe that prices will go up in the future. On the other hand, when investor sentiment is negative, it means that investors believe prices will go down in the future.

Economic events can be classified as macroeconomic events and microeconomic events. Macroeconomic events are those which have a broad impact on an economy such as interest rates or government spending, Microeconomic events are those that have a more narrow impact, such as changes in wages or employment rates.

There are 7 factors that affect the price of crypto-currencies:

1) Economic Factors

The world of cryptocurrencies is a volatile one. Vast swings in prices are inevitable, and there are a number of factors that affect the cost of these currencies. Economic factors such as inflation and interest rates can play an important role in price fluctuations.


Economics is a social science that studies the production, distribution, and consumption of goods and services. Economics analyzes how scarcity, competition, and cooperation influence economic decisions.

2) Political Factors

Cryptocurrencies are not immune to the ups and downs of the world. The price of a currency is influence by factors such as political events, economic changes, and technological developments.

Crypto-currencies are an interesting investment that are constantly fluctuating. However, some trends seen across the board which can attribute to various factors. These factors include political, economic and regulatory factors.

3) Technological Factors

Cryptocurrencies are digital currencies that not tied to a country or government. They are create and stored electronically. The term “cryptocurrency” refers to any type of digital currency that uses cryptography – the process of converting legible information into an almost uncrackable code – to regulate its creation and control its transactions, rather than relying on central authorities. There is no central bank or central issuer.

One of the factors that affect the price of a crypto-currency is technological factors. The level of decentralization and security is important to a coin’s value. Developers will have to work hard to make sure their technology can compete with that of other coins.

4) Social Factors

The price of crypto-currencies is greatly influence by social factors. The more people are aware of a currency, the more stable its value will be. When new investors join the crypto-currency market, it can lead to a domino effect and cause the value to rise exponentially.

There are many factors that affect the price of a crypto-currency. When people talk about a coin, it can make it jump in price. The people who talking about a coin or taking action on the coin make up what is call the social factor.

5) Market Conditions

There are many factors that affect the price of a cryptocurrency. Some of the more important ones are supply and demand. The market conditions of the world economy have an impact on the price of cryptocurrencies, just like they do with any other product or service.

The price of crypto-currencies changes depending on the market conditions. There are 7 factors that affect the price of crypto-currencies and they are: 1) demand and usage, 2) supply and popularity, 3) security issues, 4) regulation, 5) market manipulation or hacking, 6) speculation and volatility, and 7) new features.

6) Global Events

In December, Bitcoin’s value peaked at $19,783.21 and plunged to a low of $6,141.54 on January 15th. The decline in Bitcoin’s value was largely attributed to global events that shook investor confidence. Such as the US Securities and Exchange Commission rejecting two Bitcoin Exchange Traded Funds (ETFs) and China announcing it would limit power use on Bitcoin mining hardware.

7) Speculation

The price of Bitcoin determined by many factors, including the features and intended purpose of the currency.

Bitcoin is a form of digital currency. It is also a kind of Internet-base money, which has describe as the “first decentralized digital currency. Bitcoin is not back by any government or bank and it relies on a revolutionary new technology called blockchain

There are also 7 factors that affect the price of crypto-currencies and they are: 1) demand and usage, 2) supply and popularity, 3) security issues, 4) regulation, 5) market manipulation or hacking, 6) speculation and volatility, and 7) new features.

Supply & Demand And The Law of Supply and Demand

The law of supply and demand is an economic principle that states that the price of a product or service will increase when the availability decreases and vice versa.

The law of supply and demand is one of the most fundamental concepts in economics, but it can be difficult to understand. The most basic explanation for this law is that when demand for a product increases and supply remains unchanged, then prices will increase. However, if supply increases while demand stays the same, prices will decrease.


The law of supply and demand has been used to explain many aspects of the global economy over time. For example, it can be used to explain why some countries have inflation while others have deflation. It can also be used to predict how prices for goods may change in the future due to changes in technology or government policy.

The law of supply and demand is a fundamental economic principle. therefore it states that the price of a product will rise if the demand for it exceeds the supply, and vice versa.

The law of supply and demand is not just an economic principle. It also applies to other fields such as bitcoin prices. For example, when bitcoin introduced in 2009, there were only 21 million bitcoins in circulation. This scarcity made people believe that bitcoin was valuable and they would pay more to buy one bitcoin than they would have paid if there had been many more bitcoins in circulation.

Trading Volume And Market Capitalization

The trading volume is the number of units of cryptocurrency bought and sold over a certain time period. The market capitalization is the total value of all units of cryptocurrency in circulation.

The trading volume can be high, but if it’s not accompanied by a high market capitalization, then it means that the price will be low. Trading volume has an impact on crypto prices, but it’s not always predictable.

The trading volume is one of the most important indicators of how liquid a cryptocurrency is. The higher the trading volume, the more liquidity there is in a market. This means that it’s easier for buyers and sellers to find each other and for transactions to take place at a fair price.

Cryptocurrency markets with high trading volumes are more likely to have lower prices because it’s easier for traders to buy and sell at prices they’re happy with. This also means that it’s less likely that traders will have to pay high fees on their trades.

Related Reading:

Crypto Trading: High-quality tips for professional crypto trading

How Do Purchase BTC With USD On Poloniex?

What is Decentralized Credit Cards company?

Dogecoin Vs Bitcoin – What’s the Difference?

How to Make Money With Your Dogecoin Wallet

Top 10 Best Decentralized Credit Cards Review