Factors that affect the value of cryptocurrencies

As of 2018, there are already more than 2,200 types of cryptocurrencies on the cryptocurrency market. All these cryptocurrencies are the result of the rapid development of the cryptocurrency industry. One of the most attractive factors for investors is the ability to guard against the depreciation of the real currency, as well as its devaluation and loss of purchasing power within the country in which they live.

In the world every day there are more and more stores in which they already directly pay for goods with various types of cryptocurrency. And in some countries, cryptocurrencies have even begun to be used almost on a par with the main monetary unit. Japan is one of those countries. This country is one of the first countries whose government has relaxed the policy of banning the use of cryptocurrencies.

It is because of the understanding that the emergence of cryptocurrency will change the sphere of influence on the financial world and will take away the possibility of collecting from many fiscal services, and from regulatory services – the control function, the governments of most countries of the world have introduced a ban on the use of cryptocurrency.

This was the primary reason why the first Bitcoin cryptocurrency was used only on shadow resources. However, after not so little time, bitcoin, and along with it all other cryptocurrencies, have become a full-fledged form of payment, which is accepted both online and in regular outlets.

A number of factors can influence the decrease or increase in the cryptocurrency exchange rate. These factors can be both intentional and not intentional, and also have a speculative character. Individuals can speculate on the course, pouring huge amounts of money into the course, and legal entities that influence the course in a complex way using certain methods of influence. Such organizations often influence the cryptocurrency rate by pumping and dumping the rate.

It works as follows: first, a pump begins – when a pre-coordinated circle of people begins to actively and in large quantities buy a certain cryptocurrency, thereby increasing demand, and slightly provoking an increase in the rate. It works as follows: first, a pump begins – when a pre-coordinated circle of people begins to actively and in large quantities buy a certain cryptocurrency, thereby increasing demand, and slightly provoking an increase in the rate. This attracts outsiders who want to invest in a seemingly growing cryptocurrency. Such inexperienced beginners are called “Hamsters” in the crypto industry. This is because they, like hamsters, hide grain in their cheeks, start stuffing crypto coins into their wallets, seeing that they have actively begun to grow in the rate and hoping that this will continue.

However, it is at this moment that the dump begins – the shipment of those same coins at a higher price, by persons who previously, by agreement, massively bought the above-mentioned cryptocurrency. Accordingly, in a rush, beginners (Hamsters) are actively buying this currency from them at a higher rate than they originally bought it. Hence the saying "cut hamsters".

But in most cases, demand forms supply due to natural factors. For example, a fall in the rate of a cryptocurrency can be caused by the actions of government agencies. Although the creators of the crypto industry have stated that cryptocurrency is a currency that no government in the world can influence, nevertheless, it is possible, however, they can still influence. An example is the case from 2013, when the Chinese government recommended that its financial institutions not conduct transactions in bitcoin, which in turn lowered the rate of the world's main cryptocurrency by three hundred dollars at once.

A year later, there was another drop in the rate of the cryptocurrency, as the transfer of funds to the Bitcoin exchanges was artificially interrupted. In 2017, the rumor that China is going to restrict the activities of all Bitcoin exchanges. This caused significant excitement among the owners of bitcoin, which led to the active sale of the cryptocurrency and the fall in its rate.

In addition to the government, keyboard craftsmen do not stand aside, who tried to interrupt the work of several large bitcoin exchanges with all sorts of hacker attacks, which they managed to do in 2014, albeit not for long. But this time was enough to squander the bitcoin rate by as much as 23%. No less leverage are rumors about the vulnerability of a particular cryptocurrency, which also negatively affects the rate. There is a whole list of smaller factors influencing cryptocurrency rates. Separately, they should not even be considered, but if they accumulate in one place and at one time, then this already becomes tangible for the course. The paradox is that no one can ever predict in what combination and with what aggravating circumstances they will affect the cryptocurrency rate.

As of 2019, the crypto industry market has reached the level of capitalization equivalent to $60 billion. Such interest was shown not because everyone is familiar with cryptocurrencies, but because investors began to consider cryptocurrencies as an investment tool or a platform for capitalizing accumulated assets.
 

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