The cryptocurrency is new in town, we read in the headlines; Twitter does have it, and not to forget its advertisements that are quite popular among people. Today people are investing their money into cryptocurrency as it is said to be reliable in the future. Undoubtedly, a future investment, its value depends upon the market demand for it. Also, not to forget about cryptocurrencies that they are volatile. It has no centralized organizing body and no physical product. It is a digital or virtual currency. But, the word cryptocurrency gained value in recent times only, can say a decade before, no one knew what it was. So, how did it emerge and become so popular?
Cryptocurrency
A cryptocurrency, in simple words, is a digital asset. It was called out as a currency as it was supposed to use as a medium of exchange in the same way that we use fiat currencies. However, cryptocurrency is more volatile than fiat currency.
Cryptocurrency – Present Time
Cryptos is used as a monetary system, its trading business is a growing feature of the crypto world. It is on the top holding a huge value. One bitcoin is equal to 51, 731euro. Cryptocurrencies available in the market are bitcoin, altcoin, ethereum. They are highly in demand and are now also used as a medium of payment.
Cryptocurrency History
Cryptocurrencies were introduced in 2008 after the economic fall-down. They weren’t much known and lived as common coins till 2011. The first instance occurred in 2011 when crypto saw its value increase. Bitcoin’s price jumped from 0.86 euro in April to as much as 27.58 euro in June. However, the price bottomed at 1.72 euro in November of the same year.
The year 2013 turned out as a conclusive year for Bitcoin’s price. The virtual currency trading started at 11.55 euros and saw two price bubbles in the following year. The first was witnessed in April when the price shot to 189.59 euros. This instant increase followed an equal instant speed resulted in an equal decline as the price dropped to 60.32 euro in mid of April.
In early October, the cryptocurrency traded at 10619 euros. By December, it spiked to 996.48 euros. However, within three days the crypto was trading for 665.18 euro. Those rapid changes signaled a plunge in the crypto prices, the beginning of 2015 witnessed the crypto price at 271.57 euros. However, After 2016 when new places emerged, the bitcoins started to rise, from there is no looking back.
How Crypto Gain Value? – from 2017
In 2017, a gradual increase was observed in the places where Bitcoin could be sent. This was witnessed when its popularity was rising though value remained below. As more and more places emerged, it was clear that the cryptocurrency bio-bubble is going to expand. The market cap of cryptocurrencies rose from 9,47,98,99,000 euro to 2,58,48,45,00,000 euro. The banks included Citibank, Deutsche Bank, who released the statement that they were looking for ways to invest in bitcoin. The technology behind bitcoin- blockchain emerged. The value of bitcoins emerged. Bitcoin Up is one of the best platforms for Crypto investments.
Factors Affecting the Value of Cryptocurrency
Cryptocurrency value is primarily affected by its supply, market demand, availability, and competition for cryptocurrencies.
- Buy low, sell high- this classic investment strategy can be used to increase the value of crypto, buying and holding the coins.
- Mining – It plays an essential role as mining uses proof-of-work mining that allows bitcoin to attach a physical value to its transactional system.
- utility – as more institutions would invest, its value would automatically increase, thus increasing its utility.
- Media coverage – crypto prices fluctuation also depends on the media coverage, users can do this through their social accounts too.
How does Cryptocurrency Gain Value?
Six months ago, the price of one Bitcoin was 6,000 euro. Today its value is as much as fifty-one thousand euro! (51,000). Today Bitcoin is trading at a very high price and holds the position of second-largest in terms of marketing campaigns. It crossed a new high of over 1000 euro and rose over 1,000% in value in one year. Likewise, many cryptocurrency prices have seen a rise. Investors are wondering the question, how and why? Some of the reasons why cryptocurrency prices are rising are:
Institutional Adoption
Cryptocurrencies, especially, Bitcoin have seen the rise. After institutions started investing in it, the prices rose, and now considered heaven. In the current scenario where digital currency is rising and making its way into the market, cryptos are the new future investment.
A trend was witnessed. Public companies started converting their cash treasures into cryptocurrencies. Many American companies have converted their huge cash of more than 45,00,000euro into bitcoin. An American company bought bitcoin worth 5,00,000 euro! A better place for reserving your cash value! undoubtedly.
PayPal
In October 2020, the global digital payments company Paypal announced that they will now be launching the selling and buying of cryptocurrencies. This majorly included bitcoin, ethereum, bitcoin cash. They also announced payments using cryptocurrencies! As the demand has risen, the companies have turned their cash reserves to crypto, a step towards digital currency. Paypal is a company with 350million users and now is capable of dealing in cryptocurrency, also not to forget 30 million merchants who have one more option of payment now, the crypto payment.
- 21 million in total:
- Cryptos are 21 million in total. Its value emergence among people has emerged. Thus, leading to its higher value in the market.
Accessibility to the Public
The emergence of digital currency has resulted in people investing in it. It is free from government norms and reliable future investment. People are making their cash converted into it, though unwilling to use it for transactions.
Crypto Value Dependent on
- How many new coins are mined, how many current owners want to sell their coins?
- The demand for a cryptocurrency depends on demand, increase in demand, increase in crypto value.
- Cryptocurrency gains value from its high demand, just like a newly launched product in the market holds value, limited supply, thus resulting in the high value it. The same is with cryptos, people are getting to know more about it, their value is likely to increase.