The crypto markets can certainly be confusing. Particularly as they so regularly fluctuate. Without the right knowledge and understanding of the markets it can be difficult to grasp exactly what is happening and why, as well as what this means for those invested. Due to the volatility of cryptocurrency, you’re not wrong to wonder why it is so valuable. The team behind utility token GMR, have helped to explain what exactly plays a role in influencing the crypto markets.
Current Affairs and Crypto
Just like any market, the world’s current affairs lead the value of cryptocurrencies to fluctuate. Which we have seen in recent weeks, due to the Russian invasion of Ukraine, many investors decided to dump their riskier investments. This led to a great drop within the value of such cryptocurrencies like Bitcoin. However, this doesn’t deter some from arguing that cryptocurrencies are in fact safer than traditional currencies in times of global uncertainty.
Government Regulations and Laws
You won’t be surprised to learn that many governments are trying to clamp down against the decentralised and unregulated nature of the crypto market. Looking for a way to control the market, much like traditional trade markets, some governments are looking at or have brought in regulations and laws around the exchange of cryptocurrencies. When a country with a large number of investors decides to do something like this, it is inevitable that the market will be impacted by their decision.
For some of you, social media may have been the place you first learnt of cryptocurrency. In fact social platforms are where many people get their information about the market from. With social trends influencing so much in our lives, it makes sense to know that social media has some impact on the crypto market too. Many a cryptocurrency’s value has been know to hit record highs and record lows due to hype around theses on social media. Many are influenced by leading names in the crypto community, particularly celebrities and business owners who have huge amounts invested in crypto. For some amaetuer investors anything their favourite influencer says goes.
The number of investors and competitors
This may seem obvious but as with any type of investment, the number of people investing will of course make a huge difference to the value of the good or product. With cryptocurrencies, when there are greater numbers of people buying and using that token or coin, the higher the initial investment cost. Which is why so many experienced investors are constantly on the lookout for the next breakthrough coin or token.