What drives the price of cryptocurrencies?
Markets for cryptocurrencies are driven by supply and demand. Due to their decentralized nature, they are immune to many of the economic and political issues that plague traditional currencies. While there is still a great deal of ambiguity surrounding cryptocurrencies, the following factors can have a big impact on their prices:
The total quantity of coins in circulation, as well as the pace at which they are released, destroyed, or lost.
Market capitalization refers to the total worth of all coins in circulation, as well as how users perceive this value to be changing.
The way cryptocurrency is portrayed in the media and the amount of coverage it receives.
Integration: the ease with which a cryptocurrency can be integrated into existing infrastructure, such as payment systems for e-commerce.
Major occurrences such as regulation revisions, security breaches, and economic disasters are examples of key events.