When entering the trend of cryptocurrencies, one of the unknowns that most draws attention is to know how these coins increase and decrease in value almost without apparent reason, however, everything is more complex and accurate than it seems.

What determines the value of a cryptocurrency?
The cryptocurrencies are a new asset that works on the web, it circulates around the world and has different uses. The cryptocurrencies usually have a fairly unstable quote, but this is due to a series of characteristics that are responsible for determining the value of that asset. Among the things that determine the value of a cryptocurrency, are the following:

1- Trust, an essential factor for these new cryptocurrencies

One of the qualities that stood out in Bitcoin and for that reason became the cryptocurrency with the highest price in the market, was the confidence it generated in the public. Any cryptocurrency that wants to succeed in the present must generate confidence in potential investors, this is achieved through the support that can be obtained from large and trusted entities.

Getting the support of large entities to improve the popularity of a digital currency, is something that has made many platforms that have their own cryptocurrency, as is the case of Ripple, IOTA, among others.

2- Supply and demand, one of the most influential factors

Purchase and sale operations in the cryptocurrency market, is one of the factors that greatly influences, in other words, if people buy cryptocurrencies, their value tends to rise, while when people sell, the value of the cryptocurrency goes down.

Similarly, the cryptocurrency hoarders also influence the price of the cryptocurrency, since they use the market to obtain cryptocurrencies, but they do not market them, they accumulate them to create a speculative market around these virtual currencies.

It is worth mentioning that this is one of the factors that most influences the value that a cryptocurrency can have.

3- Utility, a factor that will be much more influential in the future

Cryptocurrencies are classified, and currently have various utilities although all share the peculiarity of being able to carry out transactions on any side of the world through a purse, cryptocurrencies have special qualities that differentiate them.

As the main quality of Bitcoin is to be able to carry out global transactions quickly and easily, other well-known cryptocurrencies such as: Ethereum, IOTA, TRON, Bitcoin Cash or other assets, have certain utilities such as making smart contracts, synchronizing appliances that work with IoT, store data for free, as well as send and receive them, among others.

The utility that can be given to cryptocurrencies influences the price of such cryptocurrency, since, the more useful it can be given, the more people will want to acquire said cryptocurrency and therefore, the demand will increase, which as mentioned above, directly affects the price of a digital currency.

At this point, it is very important to mention that many entities around the world are developing new technologies, to increase the usefulness of cryptocurrencies, therefore, although currently the utility that can be given to cryptocurrencies is somewhat limited in comparison to the use that can be given to fiat money, this does not mean that it will always be this way, since everything points, that the use of cryptocurrencies will increase in the future and therefore, the price of these will go in increase.

As we always say in CryptoTendence, it is important to know how to choose projects that have something to offer, since those are the ones that will last over time.