Most people who are just getting started in the cryptocurrency game might have no idea at all about what’s coming for their exchange rate. The crypto market is a really strange one, and it can be pretty scary to get into.

 

Today, we’re going to cover five factors that determine the price of cryptocurrencies so you know what to expect as an investor. By understanding these factors and how they work, you can make more rational purchasing decisions and avoid potentially costly mistakes in your investment portfolio. So read on for some valuable tips!

 

#1: Supply vs Demand

Cryptocurrencies are a completely new kind of asset, and there’s a lot of confusion about where the money is coming from to buy cryptocurrencies in the first place. The problem is that there are actually two different kinds of investors in the cryptocurrency market: those who want to get rich very quickly, and those who take their time to get rich slowly. The ones who want to get rich quickly need money entering the market in short order – hence why a lot of large institutions and small hedge funds are entering crypto markets as fast as they can, hoping that it’ll make them even richer than they already are.

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#2: Initial Capitalization

Bitcoin is the king of crypto, and it’s also one of the biggest reasons you’ve been seeing such high prices lately. Bitcoin is so well-known that it becomes a self-fulfilling prophecy – when more people know about Bitcoin and bitcoin price because of its high value, then more people want to get in on it because they’ll make more money. As more people jump on board, the price keeps going up!

 

#3: Business Viability and Adoption

You’ve probably seen an internet meme about how most cryptocurrency businesses are scams or get-rich-quick schemes. But the reality of the situation is that a lot of people are using cryptocurrencies in their everyday lives, and they’re getting pretty great value out of it!

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#4: Exchange Volume and Popularity

The most popular cryptocurrency prices have always tended to have higher exchange rates than their lesser-known counterparts. This is because they’re generally more widely accepted and more valuable as a consequence. Many cryptocurrencies that come out today are destined to fail simply because they have a very niche market – even if their coin’s value is higher than most others, it isn’t necessarily useful unless the market is big enough to support the infrastructure needed for long-term success.

 

#5: Human Psychology

One of the main things you’ll want to keep in mind as an investor is that human psychology can cause patterns to form in price charts that sometimes cannot be explained by other factors. This happens with many different kinds of assets and investments, but it’s especially true for cryptocurrency trading since there are fewer analysts involved.

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Takeaway

We’ve talked a lot about the different factors that determine the price of cryptocurrencies, but the bottom-line is this: As an investor, you want to get into a good cryptocurrency before it’s too late. There’s a lot of profit to be made from cryptocurrency trading, and with new ones popping up every day, your chances of making some big money are pretty good! Now go out there and learn about new ICOs and traders – there’s plenty for everybody!

Forex is now a large and most liquid market, over $4 trillion in daily turnover, a market that can resist even the vainest attempt to manipulate it. For this reason alone, currencies are deemed to be the purest form of trading, but winning in this arena is not nearly as easy as marketing claims would have you believe. So there are some tips related to forex for dummies that will help you gain knowledge on this topic.

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