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What factors affect the cryptocurrency prices ?

What affects crypto prices ?


Cryptocurrency is a currency that is only present in digital form. The price of cryptocurrency is high because it is only present in limited numbers. Trading in crypto assets is the same as buying or selling in the stock market.

People who have invested in crypto a long time ago are getting good returns. The prices of crypto assets depend upon various factors. A few of them are described below.


Huge Corporations

Last week Tesla, the electric vehicle company unveiled a purchase of $1.5 billion worth of bitcoin. As soon as this news reached the people, the prices of bitcoin touched new all-time highs and broke all previous records of the cryptocurrency market. 

The automaker company also said that it would start accepting Bitcoin as payment in near future from its customers. This move from Tesla prompted other companies to do the same. Companies like PayPal and Square already accept bitcoin as payment. 

Later Mastercard joined the league by allowing the use of some cryptocurrencies. Apple Inc. is on the list of companies that may start accepting cryptocurrencies. This completely changed the fortune of Bitcoin and it now nears $1 trillion value.

Celebrities

Elon Musk, the Tesla CEO is the biggest example of how one person can control the market. His tweets were the reason that prices of once dead meme cryptocurrency went soaring to the moon. 

His efforts were fuelled by a couple of celebrities including Snoop Dogg. Every single tweet from Tesla CEO was received seriously by the people. He shared his meme holding dogecoin up which proved to be a major factor in the pumping of Dogecoin.

Huge purse holders

A detailed post on Reddit revealed that the largest wallet owner of dogecoin is Robinhood Markets. It holds $2.1 billion or 28% of all dogecoin in circulation. It is referred to as dogecoin "whale" in the reports.

Many were puzzled over the identity of the whale including Tesla's CEO Elon Musk. Musk expressed his concerns previously with a tweet about its concentration among few people. The meme-based cryptocurrency nearly touched the $10 billion mark.

Support from Government

Support from government matters in the blooming business of cryptocurrency. If the people in government-speak in favor of cryptocurrencies the prices of cryptocurrencies are likely to soar.

Likewise, if governments do not support or speak against cryptocurrencies, people are going to feel insecure about investing in cryptocurrency. This may lead to people backing out of crypto trading.

Media hype

Media outlets can help popularise cryptocurrency. This may cause fluctuation in the market. Trending news about crypto exchange hack can cause its prices to drop. 

Recently a UK-based crypto exchange, EXMO faced a DDOS attack from hackers which knocked down the site offline for hours. This causes a lack of confidence in people who want to invest in crypto assets.

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