We all know that the crypto market is volatile. But what causes prices to increase or decrease? Here are 5 things that cause price changes in crypto:
1) News and Announcements
The main reason behind those huge price increases or decreases, especially those of Bitcoin, is news. The news that will affect the entire crypto market as a whole will be released from time to time. There are factors such as government regulations, taxes, ban issues, hacking problems, etc. If there’s anything wrong with any part of it then it will affect the entire industry and thus the price of coins too.
2) Hardforks and Softforks – there’s a change in code
If there’s a change in the code of a coin or if there’s any hard fork or soft fork then it will affect the price. You can see that almost all coins experienced an increase in their prices right after they did a hard fork or soft fork. It’s because the change is meant to create improvements such as increasing block size, changing PoW algorithm, etc. and some people who believe in the coin will buy more so they can help support it.
3) New Coins Added To An Exchange – new exchanges mean new opportunities for investors and traders
Adding a new coin to an exchange is a big deal for that particular coin because it will open up the opportunity for more investors and traders. The moment you add a coin to exchange, its price will go up significantly in just one day. That’s why it’s hard to buy some cheap coins because new exchanges are created almost every day and new coins are added too.
4) Pump and Dump Groups – they create false hope
Pump and dump groups are pretty much the same thing as scammy Rico’s. They make announcements on social media channels such as Twitter or telegram claiming that they will increase the price of certain crypto by pumping it which means buying a large number of coins all at once to push the price upwards but what they do is sell all their coins when they have increased the price enough then leave with people’s money and usually do it with a coin that’s cheap and not used much.
5) Scammers – they also create false hope
Scammers are everywhere in crypto. And they’re quite smart too because most of the time we never hear about them again after they steal someone’s coins or cryptos. A lot of new investors who aren’t familiar with how things work fall prey to scammers due to their false claims such as “guaranteed” returns, free giveaways, etc.
If you ever come across any offer like this then avoid it at all costs. They will make you invest your coins and once you pay up (which is sending your coins to them), they’ll leave and run off with your money and never be seen again.
My advice to everyone out there new to the crypto world is not to believe anything you see or hear on social media until it comes from a reliable source such as coinmarketcap, coindesk, etc., and always do your due diligence before investing in any coin.
This was 5 Things That Cause Price Changes In Crypto, hope this article will be helpful for you all, and any comment is appreciated! Thanks for reading and happy investing!