The primary reason for the fluctuation of crypto assets is its infancy. However, several other factors like speculation and whale accounts govern the rise and fall of digital currencies. Read on to learn more.
Crypto assets would be one of the top terms on the list of the world’s most volatile elements. Since its inception, crypto assets have been regarded as one of the world’s most explosive and volatile assets.
While the crypto business has made itself incredibly difficult to predict in terms of crypto-asset price movement, it is possible to discern how the price of crypto assets changes in the market by studying why crypto assets move.
Why Does The Crypto Assets Price Vary So Much?
As crypto assets are still in their infancy as a market, they are in process of discovering their rational uses. The upshot of this newness is significant market volatility, mainly driven by investors’ increased experimentation to understand how the crypto asset market changes.
The price of Bitcoin (BTC) hit an all-time high in 2021, with prices over USD 69,000 in November of that year. Tesla and Coinbase occurrences caused the rise in the BTC prices. Another reason was the news that Tesla purchased 1.5 billion US dollars worth of the digital coin and the IPO of the US’ largest crypto exchange.
However, due to government regulatory concerns, the world’s most well-known crypto-asset had a significant correction in April. Another factor, according to analysts, was a power outage in China’s Xinjiang province. This unanticipated occurrence decreased the Bitcoin hash rate — the number of Bitcoin produced — and may have frightened investors into dumping their investments.
What Are The Other Factors That Influence The Crypto Market?
The crypto asset market has been difficult to predict since it’s establishment. A few elements determine the market trajectory. A few of these are listed below.
Exclusively Digital Asset
Like Bitcoin and Ether, most crypto assets are digital assets with no tangible commodity or money behind them. The rules of supply and demand determine their price. In the absence of any other stabilising element, such as government support, many factors may cause volatility in demand or supply in the crypto asset market.
Technology Advancement
The blockchain or any alternative technologies these coins rely on are still developing. The Bitcoin concept was initially introduced about a decade ago. There is a scalability issue when a smart contract is not verified within the desired timeframe, causing fast downward pressure.
Commentary by Fragile Investors
Most of the investors that invest in crypto assets are part-timers. They arrive expecting to generate quick money, but they lose patience and leave when that does not happen. This frequent participation and departure also result in volatility.
Scarcity And Whale accounts
It is currently projected that 21 million bitcoin will be created by 2140. As the number of investors grows, the number of coins per investor on an average decreases, thus increasing their prices.
There are also whale accounts, which control a considerable portion of a coin’s entire market circulation. Suppose several whale accounts begin trading simultaneously per a plan. In that case, they begin to influence the crypto market, and prices are impacted as a result.
Although crypto investments are not mainstream currency, you can still use them in multiple ways. Here is a list of utilities you can obtain with your crypto assets.
- Transferring money at a low cost.
- With ‘Yield Farming,’ you can earn interest on Bitcoin and other crypto-assets.
- Censorship-resistant alternative wealth storage.
- Invest in cutting-edge early-stage enterprises.
- Make personal transactions.
- Remit non-cash remittances.
- Earn money by posting content.
- Travel the world & beyond
- Lend and Borrow
Bottom Line
As consumers and businesses get more familiar with virtual currency, bitcoin and other crypto-assets trades rise daily. There are multiple reasons for the prices of digital currencies to go up or see a dip. The underlying principle of these digital assets is volatility.
Unfortunately, crypto goods are not adequately regulated in India. You can still dabble in crypto trading, but this can be tricky as the crypto market is highly volatile. This is where Unocoin comes in. We at Unocoin understand the need to safeguard consumer interests because this type of trading and investment carries hazards that consumers may be unaware of. Hence, trading on our platform can be pretty beneficial. You can easily view the price of crypto assets and determine which ones you want to invest in on our app.
About Unocoin:
Unocoin is India’s first crypto exchange and trading platform. It’s not just the most secure, feature-rich exchange app; it’s also the most trusted Indian crypto app. The recent app development has made Unocoin one of India’s fastest and smoothest KYC processes. With Unocoin, you can get verified in no time, start trading crypto on the go and buy your first crypto by giving only your email address and Aadhaar details.
India’s first and most secure cryptocurrency trading app, Unocoin, allows you to buy and sell bitcoin instantly with its unique Instant Buying and Selling feature. You can also buy Ethereum (ETH) with INR through your Indian bank account. With over eighty-five altcoins listed on this crypto trading exchange, you can also accept bitcoin from friends at any time and anywhere in India. And unlike other cryptocurrency exchanges, Unocoin lets you diversify your crypto portfolio according to market capitalisation (Market Cap) or volume with its Crypto Basket feature. For users just starting in the world of digital assets, Unocoin offers an exciting feature known as the Systematic Buying Plan that lets you buy bitcoin or Ether periodically over a set period for as little as ₹ ten each month. So for an innovative approach to trading cryptocurrencies in India, look no further than Unocoin — the best cryptocurrency exchange in India!
Please find the list of authentic Unocoin accounts for all your queries below:
- YouTube Channel: https://www.youtube.com/c/Unocoin/videos
- Newsletter: https://medium.com/subscribe/@Unocoin_growth
- Blogs: https://blog.unocoin.com
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- Playstore link: https://play.google.com/store/apps/details?id=com.unocoin.unocoinwallet
Disclaimer:
Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).
