Crypto prices

An arguably universal and independent monetary unit, crypto currency gains its value across the world. It has all the characteristics that distinguish money from other resources:

• divisibility;
• counterfeit protection:
• reliability;
• universal recognition.

At the same time, it is based on pure mathematics. This type of currency is not based on trust in the issuer (as opposed to paper money) but is based on trust in itself. It was high popularity and generally provided a stable growth. Every day, the number of people dealing with crypto currencies is growing, which provides the crypto currency even greater stability and reliability. While this money will be actively used in purchases/sales, it will be popular and prestigious.

The mechanism of the crypto currency system consists of obtaining (creating) it using algorithms. These algorithms can be either calculated or created and the amount of the crypto currency pouring into the market is always set in advance. All participants who have provided their capacities for the computing calculations of the algorithm will receive a fee in the form of an emission.

What is different about this system?

This type of system excludes an unauthorized inflow of currency; in other words, the possibility of creating a currency is completely eliminated. Another feature of such a system is that it is not possible to write a program to replenish crypto wallets from the outside. The program itself keeps track of all transactions and keeps records of them. Crypto currency is not dependent on external factors; therefore it is not apprehensive about the fall of the economy as a whole.

All previous transactions of crypto owners are registered and stored in the blockchain system. Ownership verification of any unit of virtual currency should take place at any time. All copies of the blockcahin are stored in all nodes of the crypto software network, which are managed by the miners. Transactions are fixed and are locked; until the transaction is added to the desired blockchain, it is considered technically incomplete. After the transaction is completed, the operation is irreversible. Duplicating identical currency units and sending them to multiple recipients is completely prevented by a blockchain during the initiation and completion of a crypto currency transaction.

What do crypto prices depend on?

The prices for crypto currency as well for the money are determined by various factors. Among the main points are:

• State policy. Despite the fact that crypto currency is not connected to any government in the world, the official policy on digital money by the authorities can affect their rates and prices (especially if the state is one of the economic and industrial leaders).
• Infrastructure. The more different exchangers and crypto markets perform operations on a coin, the more expensive it becomes.
• Information in the media. Crypto currency prices are also affected by the number and nature of information about it circulating in the press, the Internet and stock exchanges. One leading economic expert can set the tone for news for a long time, which is often used by shark traders for speculation in the market.
• Economic situation. In some countries, inflation is raging so much that residents do not trust the state money, which depreciates daily, and they buy crypto currency. A vivid example is Venezuela and Abkhazia.
• Alternative investment. The opportunity to get a big profit in comparison with traditional assets, most of which brings an income of 1-2% per month, makes investors invest more and more in crypto currencies.
• Due to a small level of capitalization, the purchase of a certain crypto currency even by one large trader can rapidly raise the price to record levels.

Bitcoin prices and other crypto currency prices are completely eliminated from inflation in comparison with the traditional money. Crypto currency is valuable because of its protection from natural or artificial inflation and complete absence of fraud. Limited supply and demand, easy to use, complete anonymity, and, of course, confidence of millions of users - all these components and regulate its value. Constant growth in demand and limited supply affect the deflation of the digital currency.

The main factors of demand for crypto currencies

How big the demand in crypto currency will be is influenced by such factors:

• Transaction efficiency. The processing speed and cost of the operation compared to other currencies;
• Number of exchanges, companies, entrepreneurs who are ready to accept a certain crypto money as form of payment;
• Level of security and confidentiality;
• The number of exchange offices where you can exchange currency for traditional money;
• Investment attractiveness.

The fact that the largest traders saw the huge investment potential in Bitcoin in 2017 resulted in the demand for it, and, correspondingly, the rate, jumping promptly.

Factors affecting crypto supply

Since the main way to issue crypto currency is mining, it determines the level of supply. Crypti mining depends on such factors:

• The complexity of the mining new coins, which gradually increases due to the embedded algorithm and because of this, more and more computing power and electricity are required for it;
• Gradual reduction of compensation for each processed block.

With that in mind, mining will be carried out as long as it pays off so crypto currency process should allow the miner to receive return om the funds invested in equipment and electricity in a relatively short time.

Price change types

The change in a crypto price can occur in different ways, as a result of which the following concepts are used in the crypto currency community to reflect the current situation:

• Correction: a smooth decrease or increase in the price after a sharp jump up or down.
• Fall: medium-term decline in the value of the currency to a maximum of 7%.
• Sink: a sharp decrease in the price as a result of panic or negative news. In such a situation, the price may decrease even by 15%.

In practice, experienced traders easily distinguish a correction from a sink, and moreover, anticipate these processes in advance. Correction is often followed by a slight increase in the crypto price. But if in such a situation large volumes of trading persist on an individual crypto exchange without signs of correction, it is very likely there will be a sink.

A short-term change in price, correction or rebound on the crypto currency exchange markets occur all the time and it is possible to take advantage of a decrease in the rate by purchasing the asset in time; this can only be done at the "bottom", the minimum to which the price of the crypto currency can drop. A gradual decrease in the coins price occurs with a downward long-term trend in trades that do not differ in special volumes. Decline in the value of crypto coins has a strong dependence on bad news as well as the influence of experienced players on the crypto currency market, especially with large assets.

Sink is a planned, well-thought-out action of the major members of the industry. And although it is impossible to foresee these processes, it is always worth remembering that a sink is necessarily preceded by negative news provoking panic among market participants. The main signs of the upcoming rise in the price are increasing demand for and popularity of the virtual currency as well as high-quality mass advertising. The more people learn about this opportunity, the more they will want to invest their savings.

How to foresee a change in price

It is impossible to accurately determine the possible fluctuations in the price but they can be anticipated with a high degree of certainty if you:

• closely monitor industry news;
• monitor the dynamics of crypto currency development;
• track the trends.

It is quite clear how important it is to qualitatively analyze the information obtained during such observations. But you still should not be afraid to make quick decisions because the right moment for profitable operations can last very shortly and if you miss it, you will at best have to wait for the next such situation and at worst you will experience a loss. The speculative component of the digital currency market will always be a part of it and if you manage to "catch the wave", you will have a good profit.

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