WHO DETERMINES THE PRICE OF A CRYPTO CURRENCY?

Crypto currency. You’ve definitely heard this term before. And even roughly imagine what it is.

Electronic money? Yes. But the Crypto currency can not be equated to money in Webmoney, Paypal or funds on cards. Currency? Yes. But the crypto currency is not regulated by the Central Banks of the countries, and its rate is not directly tied to the economy of any country.

Crypto currency is a special kind of financial and payment asset, designed to revolutionize the financial sphere.

Hundreds of factors are involved in the formation of the price of any currency: it is the country’s GDP, its place on the political map, and its import, depending on it. But in the calculation, on which the course of bitcoins depends, these introductions do not participate: ordinary miners issue crypto-currency, and their personal savings can not be considered as a guarantee of a digital asset. Understanding what the growth of bitcoin depends on and what factors determine its price, able to jump both up and down in a matter of hours, is the key to earning a trader and a crypto-enthusiast.

What determines the bitcoin rate: factors affecting the price of the crypto currency

What determines the price of a crypto currency?

Still the creator of the bitcoin code, the developer of the blocking process Satoshi Nakamoto compared the crypto-currency mining with gold mining. The similarity is obvious: the value of precious metals and elements is determined not so much by their practical relevance, as by the rarity and demand. Digital money has a cost that must be taken into account in calculations, from which the bitcoin rate develops:

electricity costs;

investing in the organization of mining farms;

commission for transactions.

But compared to the price of the crypto currency, which is ready to be paid at any time by the market-controlling structures and private investors, this is insignificant waste. Most of the price is consumer demand, willingness to give in exchange for bitcoins more traditional material goods.

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