Ever wondered about how crypto currency value is determined? This is a question that was always on my mind before I started my crypto investing journey.
Crypto's value is based on supply and demand. How is supply determined? supply of a cryptocurrency depends on how many new coins are being mined and how many current owners want to sell their coins.
Now, how about demand? it depends on many factors. Demand will be increased based on how useful it is to own the coins. like you won't buy something that ain't gonna be useful for you right?
How does it gain value? there are few methods that investors do to affect the value of a crypto currency based on an article written by Frank Gogol on the STILT
Buy low, sell high – using the classic investment strategy, users can increase the value of crypto by buying and holding coins. The buying increases demand and hence crypto value increases.
Mining – the act of mining Bitcoins or altcoins can be profitable. It also impacts the supply of cryptocurrencies.
Increasing utility – as more institutions invest in crypto and accept it as a form of payment, its utility increases. As a user, you can contribute to this process. This will increase the value of cryptocurrencies over the long term.
Media coverage – crypto prices fluctuate according to media coverage. Users can impact this through their social media accounts.
