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What factors affect cryptocurrency prices the most?

It cannot be straightforward to determine cryptocurrency prices in advance. Sometimes, it can be easily a game of speculation, while at other times, it requires a lot of evaluation and digging deep into the basics of crypto coins. Regardless of what is going to be the complication, it would help if you always understood the factors that are going to determine the prices of a particular digital token for the future at You cannot simply rely on the speculations because making speculations is just partially helpful. It is an integral part, but still, you should know the factors that you need to pay attention to get the exact prices for the future. So, the cryptocurrency market is a game that must be played very carefully, and if you are a beginner in this game, perhaps there are chances that you are going to lose the game completely.

If you have made your mind completely clear about dealing in cryptocurrencies, perhaps the first thing you need to understand is the factors determining the prices. So, if you are up for cryptocurrency trading today, we will enlighten you regarding the details of the factors that can affect cryptocurrency prices in the short and long term. The factors are given below, and along with the factors, there is a detailed explanation about them given.

Demand and supply

Even though the cryptocurrencies have no physical reliance, one factor that will affect the price, like the traditional currency and the stock market, is the demand and supply mechanism. You need to know that cryptocurrency prices are also affected by demand and supply because whenever supply is abundant in the market, the prices tend to fall. Due to the large availability of cryptocurrencies in the market, there can be a sudden downfall in their prices. On the other hand, if there is a supply shortage and higher demand, the vice versa principle can be applied to the prices of any cryptocurrency in the market.


The competition does have an integral role in deciding the future prices of a particular cryptocurrency. You need to understand that due to the high competition in the cryptocurrency market nowadays, the prices keep on increasing and decreasing. Sometimes, new players entering the market can affect the prices of the particular crypto coins to a large extent. You can take the example of bitcoin. If a new cryptocurrency enters the market, there will be an influence on the prices of bitcoins. Still, if fake cryptocurrency enters, there will be no competition and no effect on the prices.


The company’s cost of creating a particular digital token affects its valuation in the market. You can take an example of bitcoin. To create bitcoin, there is a requirement for a lot of energy consumption; apart from that, the infrastructural requirements are very high. So, for adding one bitcoin to the system, the company incurred a lot of costs; therefore, the bitcoin’s valuation is also higher in the market. You can relate the prices to the cost of production with bitcoin and every other cryptocurrency that is very popular in the crypto space.

Regulatory developments

Whenever there are regulatory actions against a cryptocurrency, there is going to be a downfall in its prices. So, it is the shared nature of the people to leave the cryptocurrency, which is supposed to get restrictions in the future. You might have seen that China has banned bitcoin entirely, which was entirely foreseeable for the people of China. Therefore, they decided to leave bitcoin before China banned the cryptocurrency altogether. So, the Chinese people got to save themselves due to the market analytics as to the news in advance that bitcoin would be banned.

Coverage in the media

Media is another integral part of cryptocurrency as it covers everything about it. Whenever the media keeps covering cryptocurrencies and showing positive news, the prices of every cryptocurrency tend to increase. It is a market mechanism that applies to almost every cryptocurrency. On the other hand, if the media does not cover any cryptocurrency at all, perhaps there will not be any fluctuation in the prices of that particular crypto coin. So, media coverage does have a lot of influence on the prices of any digital token.



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