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What influences cryptocurrency prices? | Alexa Blockchain

Published

3 months ago

8 May, 2024

What influences cryptocurrency prices? | Alexa Blockchain

Observing the state of the cryptocurrency industry, especially from an outsider, can be very interesting. On the one hand, we cannot necessarily see or touch crypto assets. On the other hand, these digital assets can be worth millions of dollars and drive an entire industry.

As Kane Pepi points out, if you’re investing from one place where price is the key factor, you will find many affordable tokens on the market. If you are in a financial place where you can invest more money, there are tokens that will cost you thousands of dollars. But what makes cryptocurrencies cheap or expensive, and what drives changes in these prices? We analyze it in this article.

Supply and demand

One of the biggest factors influencing the price of cryptocurrencies is the supply and demand of the token in question. It is a classic market rule that when supply is less than demand, the value of an asset increases and this also applies to the cryptocurrency sector. If you take a look at the whitepaper (essentially the manifesto) of any blockchain project, you will likely see the team’s plans regarding releasing the token to the market to handle the offering.

In the case of Bitcoin, for example, the quantity of tokens released per block is strategic cut in half approximately every 4 years. This reduction in supply has been associated with a spike in the value of Bitcoin and has also been adopted by other cryptocurrencies. On the demand side, there are several factors that can stimulate demand for a token, particularly its utility.

A token like Solana, for example, is in high demand for use in online casinos, for purchasing goods and services, in the DeFi space, and much more. The greater the demand for a token, the higher its price. So, when you see the price of a token increase, it is due to the demand for it also increasing.

Another thing that influences the price of a cryptocurrency is media reports about it, its founders and its native project. It is not unusual for the media to impact investor decisions, and the cryptocurrency industry sees the same effect.

The media often speculates about possible changes to the price of a token and this can trigger a run to the down or up. If the media says that a certain token is the next big thing, for example, people will rush to buy it and this will increase its price. Media reporting that whales buy many units of a token or sell a mass of them could also trigger a price change. The same happens when the media gives a negative account of a token.

It is also necessary to consider the possibility of reporting its management. When former Binance CEO Changpeng Zhao was arrested last year, for example, his native BNB token suffered a price drop. Interest from popular figures can also increase the value of a token, as seen in the example of Dogecoin and how its profile (and price) increased after Elon Musk took an interest in the meme coin. So far, it is clear that media reports can make or break a crypto token.

Regulatory developments

The cryptocurrency sector is relatively new and this means that it will inevitably clash with regulators around the world. And the effects of these regulatory clashes are reflected in the price of tokens. When Ripple Labs, for example, scored a victory in its lawsuit with the SEC, its native XRP token saw a surge in prices. As the market saw it, the court ruling was an indication of the quality of the project, so they rushed to buy the token.

When the SEC approved the Bitcoin spot ETF earlier this year, it triggered a massive price spike for the token and, ultimately, Bitcoin reached a new all-time high. The past few years have seen many other regulatory successes for the industry around the world, such as the passing of pro-cryptocurrency laws, the acceptance of cryptocurrencies as legal tender in some countries, and much more. Usually, a specific token or markets in general see a boost.

Effects are also felt when negative regulatory development occurs. Whenever the SEC has announced that it is suing a cryptocurrency company or is investigating a cryptocurrency venture, the market tends to reflect this. For better or worse, regulatory developments have an effect on the crypto scene.

Associated benefits

Many cryptocurrencies offer value to customers not only in themselves, but also through the benefits associated with them. For example, the Metaverse and GameFi projects often have native tokens attached to them, and the more popular these projects become, the more valuable the tokens attached to them become.

This also applies to tokens whose underlying blockchains are widely used. Ethereum, for example, is used prominently in DeFi, NFTs, GameFi, and much more. The more the blockchain is used for various purposes, the greater the demand for its native token Ether, which will increase its demand.

Utility tokens also enjoy price spikes resulting from the associated benefits. There was a peak, for example, in fan tokens for sports clubs. These tokens are often used to unlock various benefits such as VIP sections, early access to tickets, athlete meet-and-greets, and much more. These tokens are now a highly prized commodity among sports fans, and the value of the associated benefits is reflected in their market price.

The more the crypto space evolves, the more creative uses people will come up with for tokens, whether they are used to facilitate fractional investments or to give access to exclusive experiences. This means that the tokens will continue to see an increase in market value.

Pump-and-Dump and other scams

Unfortunately, not all cryptocurrency price movements are organic or driven by genuine market forces. As an investor, it is important that you are aware of the concept of pump-and-dump. This is a situation where the creators of a token artificially increase its price to deceive investors and steal their money.

It works like this: the token is released onto the market and the creators purchase a large amount of it at once to drive up the price. Investors, unaware of this trick, then purchase the token at an inflated price hoping to profit from its development. Once the creators resell their tokens at this higher price, they abandon investors with the worthless token.

Since the token’s growth was inorganic and had no actual value, the price then collapsed. This is similar to other crypto scams such as Shithcoins which trick people into purchasing a token (usually at an inflated price) which leads to both an increase and decrease in price.

This is why, as an investor, it is important to research each token you are considering and find out whether its price is organic or manipulated.

Conclusion
Cryptocurrency prices are an endless source of fascination for those inside and outside the industry. It is important to understand the mechanisms that influence token prices to know what to look out for and how to spot both genuine and inorganic price changes.

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TokenTalk Staff

We are the editorial team of TokenTalk, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on TokenTalk, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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News

Meme Tokens Surpass Bitcoin in Turkish Trading Activity This Year

Published

4 hours ago

27 July, 2024

TokenTalk Staff

Meme Tokens Surpass Bitcoin in Turkish Trading Activity This Year

The Turkish cryptocurrency market has seen significant growth in recent years. Currently, more than half of the population invests in cryptocurrencies, according to surveys and polls.

This is evident from the fact that the Turkish Lira (TRY) is the fourth most used fiat currency in cryptocurrencies. Several macroeconomic factors are fueling this crypto adoption in the country. Therefore, stablecoins and meme coins have emerged as the favorites of Turkish investors, even surpassing Bitcoin.

Stablecoins and meme coins dominate Turkish trade

According to the latest relationship According to Kaiko, Turkey’s inflationary conditions have significantly increased stablecoin usage in recent years. In 2024, the research firm found that USDT-TRY dominates as the largest trading pair by volume on Binance, reaching over $22 billion, more than five times larger than the next largest pair, PEPE-USDT, which has $4 billion.

Notably, meme tokens have surpassed Bitcoin in terms of trading volume this year, indicating that Turkish traders are also turning to more speculative cryptocurrencies to hedge against currency fluctuations and make profits.

The increased usage of stablecoins is further reflected in the main Bitcoin trading pairs on BTCTurk, which are BTC-USDT and BTC-TRY.

One of the main reasons driving the adoption of cryptocurrencies is Turkey’s fight against double-digit inflation and the currency devaluation for years, with an average inflation rate above 40% over the past five years. In response, the central bank adopted an unorthodox monetary policy, cutting rates until June 2023. However, this worsened the devaluation of the Turkish lira, which lost more than 300% of its value from the end of 2020 to the end of 2023.

Turkey’s decision to normalize its monetary policy after the 2023 elections failed to restore confidence in the TRY, whose value continued to decline in 2024, albeit less rapidly.

Binance Sees Strong Expansion in Türkiye

Amid economic challenges, Binance has strengthened its position as one of the two largest trading platforms for Turkish traders, thanks to deep liquidity and low fees. As part of a large-scale zero-fee campaign, it offered zero fees for BTC-TRY trading between July 2022 and March 2023.

Offering a wide range of TRY-denominated trading pairs and aggressively adding new pairs in recent years have helped Binance maintain its leadership in the country despite the 2022 cryptocurrency bear market. Binance introduced 61 new TRY trading pairs in 2024 alone, bringing the total number to over 200.

Other exchanges, such as Gate.io, KuCoin, and OKX, have jumped into the Turkish crypto ecosystem, but their overall market share remains less than 1%.

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News

Top 5 PolitiFi Tokens to Buy Now for MAX Profits

Published

5 hours ago

27 July, 2024

TokenTalk Staff

Coinpedia - Fintech & Cryptocurreny News Media

With the US presidential election fast approaching, the cryptocurrency world is buzzing with new trends. In addition to the well-known cartoon-themed meme coins, a new category is making waves: PolitiFi tokens. Did you see that coming?

These politically themed crypto tokens are gaining attention, especially those centered around former President Donald Trump. Today, we explore the 5 trending Trump-themed PolitiFi tokens.

Stock up to benefit later!

1. Trump (Magazine)

Launched about a year ago, the Trump-themed MAGA token has caused quite a stir in the cryptocurrency ecosystem. Inspired by Donald Trump’s slogan “Make America Great Again,” the MAGA token has produced an astonishing 35 million percent return since its inception. Currently trading at $5.65, it has fallen 8.80 percent in the past 24 hours.

Despite this, the token’s trading volume increased by 23.23%, bringing its market cap to $248 million and securing the 220th spot on CoinMarketCap.

Source: Dexscreener

2. MAGA (MAGA)

Another token with the same ticker, MAGA, is also trending in the PolitiFi category. With 390 billion tokens in circulation, this MAGA token has seen a 11.08% price drop over the past 24 hours, but an 81.39% increase in trading volume. Currently trading at $0.0001337, it is ranked 21st on Dexscreener’s trending list and 522nd on CoinMarketCap. Despite being only two months old, it has provided early adopters with a remarkable profit of 313,373.62% at its all-time high of $0.0007354.

Source: Dexscreener

3. Super Trump Coin (STRUMP)

Super Trump Coin, a meme token depicting Donald Trump as Superman, has a circulating supply of 1.8 billion tokens. Over the past 24 hours, its trading volume has increased by 39.88%. Currently trading at $0.01112, it has dropped by 6.07% over the past 24 hours, but holds a CoinMarketCap rating of 776. From its all-time high of $0.03085, it has dropped by 64.06%. Despite this, its impressive short-term returns have made it a favorite among Trump crypto enthusiasts.

Source: Dexscreener

4. MAGA Vice President (MVP)

Launched just four months ago, MAGA VP has yet to break into the top 1000 cryptocurrencies on CoinMarketCap, currently ranked 1231st. With a value of $0.128, its trading volume has increased by 21.79% over the past 24 hours, with a market cap of $5.3 million. While it is up 110% at its current price, it is down 83.24% from its all-time high of $0.7706.

Source: Dexscreener

5. Little Trump

One of the most unique Trump-themed tokens is Baby Trump, which depicts Donald Trump as a baby president. With a circulating supply of 406 million tokens, it has a market cap of $3.5 million at a trading price of $0.008616. Although its price has dropped 9.45% in the last 24 hours, its trading volume has increased by 4.29%. At its peak, Baby Trump’s market cap was $11 million.

Notably, Baby Trump is the only token among the five analyzed to be based on the BNB Smart Chain, while the others are based on the Ethereum network.

Source: Dexscreener

It’s an exciting time for cryptocurrencies

The current political climate in the United States is spawning a new wave of meme tokens themed around various political figures. Among them, Trump-themed PolitiFi tokens are experiencing the most significant surge in popularity. Support for Donald Trump in the crypto community seems to be a driving force behind the success of these tokens.

Do you think Trump-themed PolitiFi tokens are here to stay or just a passing trend? Share your thoughts.

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News

Brett Token Price Soars 12%; Analyst Expects Further 30% Upside

Published

6 hours ago

27 July, 2024

TokenTalk Staff

Eight altcoins rally 10+% as volatility swings market

Brett, the largest meme coin in Blockchain Base, rose more than 12% on Friday, as sentiment in the cryptocurrency and stock sectors improved.

Brett (BRETT) the token rose to $0.133, up 31% from its low this month. Some traders believe the meme coin has more upside potential in the future.

Analyst is bullish on Brett

In an X-post, Michael van de Poppe, a trader with over 721,000 followers, said he is optimistic that the token will rise to $0.1712, up 30% from Friday’s trading level.

I’ve been a day trader for a long time and memes are a great way to gain that perspective.

Lots of volume.
And there’s a lot of volatility.

When it comes to $BRETTI would look for long positions in this area between $0.125-0.1325 and $0.170 as a clear identification of a potential bull run. photo.twitter.com/hWmSjCZGJa

— Michaël van de Poppe (@CryptoMichNL) July 26, 2024

If he is right, Brett’s market cap will surpass Floki’s (FLOKI), which has a market capitalization of $1.7 billion.

Brett’s bounce came at the start of the Bitcoin 2024 conference today. In a statement at the event, Robert Kennedy, an independent presidential candidate, noted that he is a big supporter of Bitcoin (BTC).

The main protagonist of the event will be Donald Trump, leading in most polls, included in Polymarket. Trump is expected to reiterate his support for cryptocurrencies. Analysts are divided on whether he will announce a Bitcoin reserve at this event.

Blockchain Base is doing well

Brett token also recovered as Base blockchain ecosystems continued to perform well. Launched in 2023 by Coinbase, Base has accumulated over $1.6 billion in DeFi assets, making it the sixth largest chain in the industry. It has surpassed popular networks like Cardano (ADA), Avalanche (AVAILABLE) and Polygon (MATIC).

At the same time, Brett and other altcoins jumped as the U.S. stock market rebounded, signaling that investors have embraced risk-on sentiment. The Dow Jones Industrial Average rose more than 600 points, while the S&P 500 and Nasdaq 100 jumped more than 80 basis points.

Brett Price

Brett Price Chart | Source: Trading View

Technically, Brett formed a morning star pattern, which is a popular reversal sign. In the past, the coin has risen by double digits when it has formed this pattern. For example, it formed on July 12 and then rose by 40%.

On the other hand, this bounce could be a dead cat bounce, where an asset briefly rises and then resumes its downtrend.

Fuente

News

Top 5 PolitiFi Tokens to Buy Now for MAX Profits

Published

7 hours ago

27 July, 2024

TokenTalk Staff

These politically themed crypto tokens are gaining attention, especially those centered around former President Donald Trump. Today, we explore the 5 trending Trump-themed PolitiFi tokens.

Stock up to benefit later!