How does Cryptocurrency rise and fall?
If you are an avid investor in cryptocurrencies or one who is trying to be a part of the crypto world, I’m sure you would have noticed the rise and fall in the pricing of the same. Today the Bitcoin market stands at $1 trillion. From a meager start to a trillion-dollar, the journey is quite commendable. But amid all this, there has been a considerable rise and fall in the pricing and value of cryptocurrencies. Although there are many Cryptocurrencies hovering over the market, the one that is the hottest selling one is Bitcoin. No one could have believed in 2009 that today 1 Bitcoin will hold a value of 35,813.10. Although there was a slight downfall in the pricing recently, Bitcoin has managed to be the apple of the eyes of the Cryptocurrency experts.
Why is there a rise and fall in the pricing of Cryptocurrency?
Before digging deeper into it, let us put it in simple words that when the number of sellers becomes more than the number of buyers, the prices tend to deflect. The functioning of Cryptocurrency in the crypto exchange market is the same as the stock market.
Reason for the rise in Cryptocurrency
One of the key reasons for the rise in the pricing of Cryptocurrency is institutional adoption. Many investors consider Bitcoin as a safe bet against inflation and market volatility. Many companies have started converting their cash payment into digital currencies. One of the examples that we have for you is Square that bought Bitcoin worth $50 million. Microstrategy also converted $425 million cash into Bitcoin. The investors of Bitcoin believe that investing in Cryptocurrency is far more profitable than choosing the conventional banking option. These are just a few of the names; there are many more companies that are actively converting cash into digital currencies.
One of the prominent names that we have is PayPal. In 2020, it announced that it would provide a platform for cryptocurrency exchange on its platform.
What makes the price go down?
Bitcoin halving is the key reason that has led to the fall in the pricing of cryptocurrencies. We all know that Bitcoin halving takes place every four years, and 2021 is the year when Bitcoin halving took place. This is the third time this process has taken place. The halving was done to keep a tab on the total number of cryptocurrencies. There are only 21 million Bitcoins circulating in the market, and when the rewards that the miners get goes down, the pricing of bitcoin also goes down.
Additionally, there are frequent rumours circulating in the market. When this becomes too evident, the pricing of cryptocurrencies gets impacted.
Conclusion
This was the basic information that impacts the pricing of cryptocurrencies. As a crypto investor, you must keep a check on the market to understand the factors influencing the same. There are defined cryptocurrency certification courses like Cryptocurrency investment certification offered by the Blockchain Council. This certification program is going to provide you with all the knowledge and information about Cryptocurrency and its investment. To enrol for this program, connect with the Blockchain Council today.
