crypto: Why is crypto going down? When crypto will go up? Factors influencing the price of digital assets

General Manager @ Excoincial Exchange

What drives up or down the price of digital assets?

First of all it's very cardinal to understand that cryptocurrencies or digital assets are very volatile in nature excluding stable coins. However, there are many factors that drive these digital assets up or down, Firstly is the issue of mass adoption by global institutions like Central bank digital currencies CBDC, this move makes the global market increase its trust and more interests to the investors. Secondly, Bitcoin EFT approval by SEC becames a dream come true for investors which they have been waiting for a long time. Thirdly, legalizing of these digital assets by countries like El Salvador etal, in short prices of these digital assets rise because of positive speculations or fundamentals. Digital assets also go down because of negative news and speculation from global leaders for example China cracking down on Bitcoin by banning it and closing down of mining operations, Nigeria's refusal to allow banks in trading Bitcoin and other currencies, Elon musk crack down on purchasing Tesla cars with Bitcoin. In conclusion, digital assets go up and down because of negative and positive speculations based on fundamental calls by adoption and crackdown that give investor confidence or distrust.

What’s your most important priority when choosing the right project/token/coin?

There are many projects with spectacular missions that have mushroomed on crypto sphere. However, there are several priority or construction that are make before choosing a project; - how powerful and dedicated is the team behind the project, - Has the team undergone any auditing certification, KYC/AML verifications, - How good is the community support for the project, - How's their roadmap and their whitepaper, - do they have enough liquidity for their currency and is it locked for a minimum number of 3years if it's a DeFi project, - Have this project partnered with several media houses and exchanges. Al these question and other analysis helps me consider effectively over what project I should invest in.

Airdrop Analyst, Trader

What drives up or down the price of digital assets?

I think there are several factors and as follow: 1. Availability vs demand the limited Availability of cryptocurrencies and its uneven distribution to increase its popularity as well as price. The increase in asset prices is partly due to an increase in the number of requests in recent years. 2. Adoption in the real world Many countries have legalized the use of crypto as a means of payment. The adoption of digital currencies into the real world, if done massively or at least legally in many large countries, will increase in value. This is due to the limited number of crypto assets. And by being adopted into real life, the demand will increase and of course trigger price increases. 3. Miner production costs The cost to mine crypto money is one of the determining factors for the price of the cryptocurrency. For example, bitcoin has a high production cost because it has to have special hardware which is usually assembled with classy and expensive hardware, CPU, GPU, server, and cooling system as well as electricity costs incurred. 4. Regulation Although digital currency cannot be intervened by any government because of its decentralized system, when cryptocurrencies enter the mainstream of a country's financial system, then that country can intervene which of course can affect the price of cryptocurrency. For example, China banned bitcoin mining throughout its territory, UK banned Binance, the world's largest crypto asset trading company, from operating in its country. There is also the discourse of imposing taxes on cryptocurrencies in Indonesia which is still being discussed by the relevant agencies. Interventions like these can impact crypto prices globally. 5. Important figures One of the most obvious examples is Elon Musk who often tweets about certain cryptocurrencies on his Twitter account. So great is Elon's influence on the crypto world, with just one tweet, he could inflate the price of Dogecoin, which was included in his tweet. 6. Fear and greed The greedy nature of the public who buys a lot of crypto money like bitcoin when there is no price movement means that in the future the price will rise even higher. The more people who buy cryptocurrencies, the higher the price of the cryptocurrency and this affects other people to buy bitcoins too. When the price of bitcoin has almost touched its highest price, many people are trying to make a profit by selling their bitcoins. The more people who sell their bitcoins, the more the bitcoin price will fall.

What’s your most important priority when choosing the right project/token/coin?

My main priority is that I must be consistent with the project and help it progress to a successful one. And when I hold the project, I must confidently not be easily provoked by other people/FOMO.

Mor-Wey Logistics Limited

What drives up or down the price of digital assets?

Crypto trading is like the stock market trading. The direction of the prices is usually guided by the influx or withdrawal of invested market capital. A project with a surge in its market capital indicates more funds from investors and people pay attention to such details. The scarcity of the assets. The simple basic principle of economics applies here as well. When the quantity of an asset in circulation is high above 50% of its total supply, it indicates that its investors are holding and not selling. Such indication points towards prospect and everyone would want to have some in their bag. Information, sometimes rumours can cause an accumulation of assets by investors or its panic sell. Positive information most times yields good results if it's feasible and negative information has its own effect as well.

What’s your most important priority when choosing the right project/token/coin?

Before investing in any project, it is important to pay attention to its use case and road map. What are their plans, their vision? How does it ameliorate societal problems? How does it empower sustainable development of our economic, social and financial problems? Does it advance any particular sector in technology in respect to the future? The objective and goal of a project is imperative when making investments. This in a way gives confidence of its longevity and perhaps, its success as a business. Then comes the money. How much is invested, and in what duration? Who are they partnering with? What is expected in return? These questions helps steer one in making a decision on whether or not to invest. Of course, there are projects with good white paper but they never seemed to make it. Yet, the right questions and good research helps limit the risks of fake investments and guides one on the direction with prospects.

Self employed and motivated crypto trader and defi analyst

What drives up or down the price of digital assets?

A digital asset is an asset in which the buying and selling of it takes place online through complex processes on a blockchain under seconds. The price of these assets fluctuate as is the normal behavior of commodities in the market. The price of any commodity whether digital or fiat or goods or stock is primarily affected by demand and supply. Other factors may include: 1 News: this is the most good and bad factor that affects the price of crypto currencies because most people love to bug or sell news about any crypto in order not to get caught up in the wrong side of things. 2 listing and delisting on exchange: as the name goes, once a digital asset is listed on any exchange (cex or dex) the price tends to increase and vicer versa for delisting. 3. Politics: many countries do not support the use of crypto currencies and some who have already begun may later get banned by the government. This affects the price due to the fact that so many people will want to take their coins down in order to prevent shutdown. 4. BTC halving 5. Geopolitical events 6. Release of new Blockchain upgrades like eth2.0 7. Crypto innovation like the nfts, metaverse and other innovations The list continues

What’s your most important priority when choosing the right project/token/coin?

When choosing the right crypto I look out for a list of things 1. Tokenomics: the tokenomics tells us how the token actually originates and now the team would allocate funds for various projects. Like the initial supply, the listing price, the initial market cap, if it is deflationary, information about burning, and so on. 2. I look at the road map: the plans they have like plans to prevent dumping after presalers take profit, plans for each quarter of the year and so on. 3. Team: the advertising, their coordination and manner of replying questions on discord, telegram or twitter. 4. Staking apy if there is any 5. Usecase

OTC Deals. ICO Advisor at Cryotoknowmics, BITOZZ and More, Strategy, Investor Relations, Big Network in The Cryptospace

What drives up or down the price of digital assets?

Behind every market are actual real people. And those people go through specific cycles in their emotions which influence their behavior, which influences price action. Let me explain: If traders perceive, that the market is a bull market, they trade by betting on price going up and setting stop losses at certain levels. There are always bears and bulls fighting about price direction. Bears may then try to bring price down, but if the bulls are stronger, price will keep moving up. If the bears win, price will go down. Also the market so far, in crypto, moves in 4 year cylces. About one year after each BTC halfing we get a bull market, because BTC gets more scarce. After BTC , ETH and then the oher ALTS move up. Once the bull market peaks price will reach a low point approx. one year later and then consolidate for 2-3 yeas before the next halfing takes place and everything starts all over. This time, we have much more money in the market because of institutional investors looking to get their piece of the pie. This is why many people think,this cylce could extend much longer. Nobody knows for sure though. I don`t want to go on tooo long. Conclusion is: Emotions of traders play a huge role if prices rise or fall. Furthermore the whales(holders of a huge amount of a specific coin) play their "games" and can move the market, cause fake-outs and the like. And last but not least - the news that hit the market also have an impact on how people feel - which in return impacts their trading behavior/price movements.

What’s your most important priority when choosing the right project/token/coin?

Real use case of the project. Do they solve some kind of real problem. Is the team behind the projec able to actually pull it off? Do they have some hype or not? For short term: where is the token in it`s cycle? For long term: will the project be a real game-changer and be needed in the future?

IT Consultant / Certified Crypto Trader

What drives up or down the price of digital assets?

The main factor that influences the price of digital assets to rise up or down are: 1. The team behind the project, their capabilities on meeting the demands of the roadmap in conjunction with the maximum supply and circulating supply. 2. Staking also helps digital assets to maintain their price. When a large portion are on staking with incentives, holders will not want to catch out in haste 3. Regular updates with a huge social active community base also goes a long way. When there is a trading contest, new partnership, product release. Holders and supporters do share, retweet, like etc which makes such to get across to a large audience and adversely affects the price most often upward. 4. Institutional Adoption: When a large institution with huge merchants embrace crypto such as PayPal, Mastercard etc, this information is disseminated across millions of their users and many tend to join crypto through this which mostly leads to a price surge,

What’s your most important priority when choosing the right project/token/coin?

The team behind the project, their capabilities. I will now have an in-depth look at the roadmap if it's justifiable and be able to deliver as scheduled before goint to check on the tokenomics

Crypto Trader

What drives up or down the price of digital assets?

The price of digital assets was highly dependent on mainstream news. A good or bad news affected the price of a digital asset severely. While a good news about a cryptocurrency or cryptocurrencies in general brought more investors to the cryptoverse, a bad news repelled some of them from the market causing a plunge in price. However, since Q4 of 2020 the mainstream media started covering the news about cryptocurrencies in a better way after institutional investors made it official about the crypto hodlings. Apart from rise of some meme coins caused by statements made by influential people, retail investors are more aware than before about investment of cryptocurrencies. Generally the retail investors now tend to understand the underlying technology around a crypto project instead of being a victim of pump and dumps. Though it is yet in a very nascent stage, yet its happening.

What’s your most important priority when choosing the right project/token/coin?

• I look at the roadmap • The activity of the community • The profile of the developer(s) • The project competitors • Usability • Incentives

Community Case management worker, crypto trader

What drives up or down the price of digital assets?

Bitcoin is the face of the cryptocurrency market. And the majority of price movement within the market is dependent on Bitcoin’s success or failure. For example, most altcoins face volatility when Bitcoin begins to drop. Anything from negative press to government crackdowns can cause a chain reaction that leads to a crypto crash. At the moment, Bitcoin is trading around $60,000 after hitting lower value down to $20,000. Apart from Bitcoin's influence there are other salient factors like government crackdowns and the resulting backlash have led to market uncertainty and volatility like right now in my country Nigeria as the government suspend any crypto transactions which led to right now closing down all bank accounts of citizens suspected to be into crypto currency transactions which in the long run could affect the price of tokens.

What’s your most important priority when choosing the right project/token/coin?

How Useful the Coin is? Unlike the stock of a company, you can’t assess crypto coins. The best way to assess a crypto coin is to check its utility. Check how useful the coin is in the real world. Whether it is solving any problem or does it have any real-world utility? For example, crypto coins like Ethereum used for transactions, payments, smart contracts, etc. These utilities simplify the agreement and settlement between businesses. This allows a platform between two businesses to make financial transactions more effectively. Therefore, measure the potential of a new coin by comparing it with other similar coins. How is it performing, what are the problems it is solving? What is the Purpose of the Coin? Check out the official website of the coin, you will find the purpose of the coin in the whitepaper. check their blog. Note, if you don’t find any information on its purpose or the site is full of only marketing stuff, then reject the coin. Analyze its Competitors Another important factor is to check its competitors. Where does it stand as compared to similar kinds of tokens or coins in the market? Remember while you consider his competitors, make sure to check the life-cycle of the coin too. Demand- Supply While checking the utility of the coin, you will figure its demand. In fact, a rise in demand ensures rise in its value. On the other hand, a high supply can reduce its price. However, a fixed supply is a good investment option in the crypto market. But ensure that the coin solves a real-world problem. Market Cap and Founder’s Holding It is crucial to check the market capitalization. Because market cap ensures liquidity, and liquid coin performs better. Another important part is to check the total holdings of the coin by the founder. This increases your trust factor before investing. When the founder of a coin holds a large amount of the coin, then it is a good sign that they believe in their project. Valuation Valuation gives you more clarity. A cheap coin does not mean that it is a good option for investment. There are other factors that must be considered while analyzing their valuation. When the price is higher than the number of users using it, then it is overpriced.

Professional Author and Crypto Trader

What drives up or down the price of digital assets?

Digital assets, unlike Fiats, has a fixed supply. For this reason, their value is solely dependent on how many people know about it, and have invested in it What I'm trying to say in essence here is that the value of digital assets is determined by adoption, hence the need for advertisement of digital assets, unlike Fiats which doesn't require that

What’s your most important priority when choosing the right project/token/coin?

When it comes to making a choice in relation to a project, coin or token, I have learnt to be very careful. This is because no one is responsible for your financial decisions, hence the need for careful consideration before putting in you hard earned income into a project. I would be listing some important features to me below: 1. Use cases: I make use case the top priority because there would be no massive adoption for a project without a use case. The value of a project increases only when there is massive adoption, which happens only when there's a good use case. 2. Adoption, or steps the company take to achieve massive adoption: I would never put in funds in a project that is not taking any step to tell the world what they do. To achieve massive adoption, one must take some steps, some of which includes Advertisements and some other things. Whenever I find a project that tries all its best to get that done, I usually hop in the train. 3. Transparency of the people in charge: Before I get my funds into any project or coin, I would ensure I have checked the people behind it, checked out their past records and some other things. Doing this would make me less disturbed. You don't expect me to invest in a project owned by a one-time prisoner, the fear would always be there 4. The last thing on my list would be the company behind that project. I would ensure I check the company behind any project I would like to invest in. I would check the company's success rate and other how successful some of the projects they found or supported is. The end point to all this is Research, I guess that's why DYOR (Do Your Own Research) is a possible phrase in crypto. As a crypto trader, you shouldn't just invest in a project because others are doing so, you should ensure you make a whole lot of research on the project

Operator

What drives up or down the price of digital assets?

We all already know ... The supply and the demand ... But why do people invest in crypto? Well, it is a technology that in my opinion is going to change the world as we know it, it is the new money that everyone should have, better money ... And also when it goes up so much and everyone thinks they can make money with it, it is a ball that it does not stop, of course it also falls a lot sometimes because there is a lot of money that comes out of the market when taking profit because there are still few places where they accept crypto and then it is sold to continue using the euro ...

What’s your most important priority when choosing the right project/token/coin?

Well, very simple, I choose a project that I see that solves things in the ecosystem and that has upward potential, that of course ... Nor do I usually pay much attention to other projects, I choose 3 or 4 of the best known and greater capitalization ....

This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.