Cryptocurrencies have carved out an essential space in the world we live in and in future are believed to replace and revolutionize our currency and payment systems. People are so excited about them and we today have more than 12,000 cryptocurrencies in existence.
So are they really meant to become a part of our society and do we really know everything about them?
In this article I shall reveal to you both good and bad part of these emerging technologies. Also I shall tell you what controls the rise and dip of these currencies.
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What decides the value of a crypto currency?
It is not so that if I make a cryptocurrency model and decide to list it today, i can and cannot decide the value on my own there will be many factors that I will have to consider before giving crypto a value.
In a way it will be me that decides the value but it will depend on how many coins I am making? How much will be available for purchase and how much will be mineable? One of the main things that would decide the value of the crypto ahead will be the the market i.e. how many people are interested in my project, the volume i.e. how much and hoe many coins are traded over a period of time. This way I can even keep the price as high as I wish but I must not let the market crash if I am creating many coins. This way I will have to start with just fractions of a coin available for trading and not many people will purchase a greater part of the cryptocurrency hence the prices will begin to fall in order not to stay at one place and circulate in the market, which is the objective of every cryptocurrency.
How does the value of Cryptocurrency change?
The way how crypto work is much different then regular currencies but it is not different than regular commerce either. The main thing that affects the value of cryptocurrency is Demand and Supply. A crypto is like a product in the market that needs to be sold. The only difference is that instead of being a physical commodity it is a virtual/digital commodity. If there is a cryptocurrency which is in great demand and only a less number of tokens are available then it is reasonable to sell it at a higher prices else if the crypto is not so popular then it will be cheaper too. The perfect example of this can be seen in case of shib coin. There are so many of them that they 1 coin will cost you a 100th fraction of the paisa.
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Other than this the Primary reason that results in the rise and dip of the prices are we the people who buy it. The value of a crypto can fluctuate depending on how much you are willing to pay for that crypto. It is as simple as this: if you feel that crypto prices will spike then you buy it at a higher price (thus contributing in the spike), if not you can offer lesser money too. On the other side it depends on the sellers, if the seller feels that a particular crypto will dip and fears a loss then he sells it instantly for a cheaper price (thus contributing in the dip), else he sells in whatever he feels is a suitable price to sell it.
This is a bad side of the trading game but you alone are not responsible for this fluctuation. This is decided by the people on the top most level of the trade, this level contains the group of people who are ready to sell the crypto for the lowest price among other sellers and the buyers who are ready to buy it for the highest price among other buyers. However one person alone ca also sell the crypto as much cheaper as he wants even he can give it free or else the buyer can also offer an enormous amount of money to buy a token and create a spike in the price but that spike will not affect the real price as the other people in the market will continue to be on their own prices, thus it will be the large mass that will effect the price. It is thus when a large group of people want to sell a crypto at particular lowest price and the another large group of people who want to offer the best price, value of crypto changes with their values.
Does the value of cryptocurrency change forever?
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In brief, there is no way we can tell how much value a crypto will have and when. This is indeed a very difficult task to read where the masses are heading towards in the long term however, we can predict what will happen in a short span of time.
The value of crypto can change and fluctuate forever, provided there is no external interference or manipulation. When a crypto has reached its threshold it will be a time when there is enough supply in the market and there is continuous trade so much so that it is very difficult for even thousand people to change the price according to what they want to offer as there will be million other who will still trade at the same price even if many sells his tokens for free. Hence the prices will remain static at this point but it will not be impossible to change it either.
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