What Encourages a Cryptocurrency’s Price Rise?

What Encourages a Cryptocurrency’s Price Rise?

Timing is everything in the world of investment and knowing when a cryptocurrency is going to increase in price is paramount to successful trading. Our quick guide to what encourages a crypto’s price to rise will point you in the right direction for knowing this.

As is the case with trading stocks and shares, the world of investment in cryptocurrencies is a delicate one and prices will fluctuate based on a variety of reasons. It could even be said that with cryptocurrency there is even more uncertainty as the technology in the grand scheme of things is an altogether new thing and the number of assets is rapidly increasing.  

However, from what we have seen over the last decade or so of crypto trading there are trends that have rapidly affected the performance of cryptocurrencies and within this article, we will help cover some of the most prevailing elements that can be a factor.

Company Expansion

The first element we will discuss is the most straightforward to understand as it has applied to all manner of trading, and this is company expansion. Practically all coins and tokens on the market are backed up by larger blockchain firms who have created them, the activity of which will have a knock-on effect on the coins’ value. KuCoin Shares are a recent example of this.

 When these companies expand or make deals that will benefit the company, it will usually make the price of their native coin or token also increase, just like with stocks and shares. Solely when it comes to crypto industry though, if a token created by a platform is incorporated into another existing system thanks to its use cases, then this will also see the value of the coin increase.

New Listing

Whenever a crypto asset is listed on a new exchange platform, it opens its trading capability to a wider audience and thus, it means that more people have the opportunity to buy it. This, in turn, increases the value of the asset. Naturally, the bigger the platform the larger the chance of this happening to the crypto asset in question.

 Another important element in relation to this is when an asset is first released via an ICO or IEO. This practically always sees an asset sell out and thus, increases the price. In relation to this though, there is nothing to say it will then drop later after the initial hype has subsided.

Mining and Staking Rewards

The benefits users stand to gain from mining or staking is another factor that can dramatically affect the value of crypto as it will determine how many people are attempting to establish more or less in circulation. Exactly how that affects the value of the crypto itself is not ever certain and it can go either way.

The most common effect example of rewards changes is in the case of a “halving” which sees miners receive fewer rewards for building blocks in a crypto’s chain. More often than not it is expected to increase the value as the total number is likely to decrease. Litecoin conducted one of these and Bitcoin is due one next year, which are expected to cause both to increase in value.

There are other factors at work too, so stay tuned for more reasons a price may soar in the coming weeks.

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