What determines the value of a cryptocurrency?
Cryptocurrencies are a new asset that works on the web; it circulates around the world and has different uses. Cryptocurrencies usually have a rather unstable price, but this is due to a series of characteristics that are responsible for determining the value of said asset. Among the things that determine the value of a cryptocurrency are the following:
1- Trust, an essential factor for those new Cryptocurrencies
One of the qualities that stood out in Bitcoin and for this reason it became the cryptocurrency with the highest price in the market, was the trust it generated in the public. Any cryptocurrency that wants to succeed today must generate confidence in potential investors; this is achieved through the support that can be obtained from large and trusted entities.
Getting the support of large entities to improve the popularity of a digital currency and make easy to buy bitcoin in india. It is something that many platforms that own their own cryptocurrency have done, such as Ripple, IOTA, among others.
2- Supply and demand, one of the most influential factors
The operations of buying and selling in the cryptocurrency market are one of the factors that greatly influences. In other words, if people buy Cryptocurrencies, Bitcoin Rate in India tends to rise, while when people sell, the value of cryptocurrency goes down.
Similarly, cryptocurrency hoarders also influence the price of cryptocurrency, since they use the market to obtain Cryptocurrencies. But they do not market them; they accumulate them to create a speculative market around these virtual currencies.
It is worth mentioning that this is one of the factors that most influences the Cryptocurrency to INR value.
3- Utility, a factor that will be much more influential in the future
Cryptocurrencies are classified, and currently have various utilities despite the fact that they all share the particularity of being able to carry out transactions anywhere in the world. Just as the main quality of Bitcoin is to be able to carry out transactions globally quickly and easily. Other well-known cryptocurrencies such as: Ethereum, IOTA, TRON, Bitcoin Cash or other assets, have certain utilities such as making smart contracts, synchronizing household appliances.
The utility that can be given to Cryptocurrencies influences the BTC to INR price that said cryptocurrency has. Since, the more utility it can be given, the more people will want to acquire said cryptocurrency and therefore, the demand will increase. Which as mentioned above, directly affects the price of a digital currency?
At this point, it is of utmost importance to mention that many entities around the world are developing new technologies, to increase the usefulness of Cryptocurrencies. Therefore, despite the fact that currently the utility that can be given to Cryptocurrencies, It is somewhat limited in comparison to the use that can be given to fiat money. This does not mean that it will always be like this, since everything points, that the use of Cryptocurrencies will increase in the future and therefore, the price of these will go in increase.