What Affects The Price Of Cryptocurrencies?
This page defines and compares the top cryptocurrencies traded around the world: Bitcoin, Ether and Litecoin. Keep reading to view live cryptocurrency prices and the latest cryptocurrency market news, and to learn about the factors that influence prices, such as speculation and regulatory ruling.
Live cryptocurrency prices What are cryptocurrencies? Top cryptocurrencies traded worldwide What affects cryptocurrency prices? Trading tips
Live Cryptocurrency Prices
Since 2009, cryptocurrencies have enjoyed a surge in popularity. There are now more than two thousand of them. Litecoin, Ethereum, and Bitcoin are some of the most popular cryptocurrencies. These are the most traded cryptocurrencies in the world, with the largest market cap.
Like all cryptocurrencies, the majors are digital assets that secure and verify transactions using computer science and complex mathematics, known as cryptography. They are not backed or issued by any central authority, unlike traditional (fiat) currencies. They are instead distributed across a network and supported by blockchain technology, which is a permanent record of transactions that can't be altered without consensus.
What are the most popular cryptocurrencies traded around the world?
The most popular cryptocurrencies are currently Bitcoin, Ethereum and Litecoin. These cryptocurrencies dominate the cryptocurrency market, and are highly sought-after by investors and traders alike.
Bitcoin is inarguably the most famous cryptocurrency to date. It was created in 2008 by an anonymous individual using the pseudonym Satoshi Nakamoto. It is the largest cryptocurrency by some distance in terms market capitalization. * It can also be used as a means of exchange. Many companies, from jewellers to gift cards to travel agencies, have accepted Bitcoin as payment via anonymous transactions.
Although there are some institutions that accept Bitcoin as currency many others shun it due to the volatile price swings. The price of Bitcoin rose sharply from $1151 in January 2017 to an all-time high $19,783 in December 2017. This was largely due to speculation. * It then fell to below $7,000 by February 2018, before rising to around $11,000 in a matter of days. Then, it crashed again to below $4,000. The potential for extreme volatility is one of the most important characteristics of Bitcoin, which traders need to be aware of.
Vitalik Buterin, a Toronto-based programmer, created Ether (ETH). It is a cryptocurrency that supports a blockchain network called Ethereum. While Bitcoin was created to be a virtual currency, Ethereum is a more general implementation blockchain technology.
The Ethereum network allows its users to create decentralised apps (known as 'dapps' and smart contracts.
Dapps are software applications that run across a network of computers, purportedly without the possibility of interference or downtime, while smart contracts are binding agreements, which are written as lines of code and can therefore automatically enforce their own clauses. Ether is used for processing transactions on the network, even those that are automated by smart contracts and dapps.
Charlie Lee, an ex-Google employee released Litecoin in Oct 2011. Litecoin was created in a 'hardfork' (split of the Bitcoin Core client), which is the free and open-source software underpinning the cryptocurrency. It was launched with the intention to be a cheaper version Bitcoin for everyday use. Litecoin offers faster transaction times than Bitcoin and a greater supply - there are a potential 84 million Litecoin that can exist compared to Bitcoin's 21 million.
Bitcoin vs Ether vs Litecoin: Summary Table
What Affects the Price of Cryptocurrencies?
Cryptocurrency prices can move in spectacular fashion, and there are a variety of triggers for such volatility. Here are a few:
Speculation has a significant influence on cryptocurrency prices. The 2018 crash of Bitcoin's prices was a result of speculative trading. After a bull market that saw Bitcoin rise to around $1,000, it fell to $20,000 in 2017. Both experienced and novice traders can trade too long, expecting the price will continue to rise and fearing missing the party.
Cryptocurrencies can be highly sensitive to news announcements. The type of news that can affect the price ranges from the CEO of JPMorgan Chase calling Bitcoin a 'fraud' to details of networks being hacked. Traders may lose faith in traditional trades due to economic and political issues, which can push up the price.
It is essential that regulations across borders keep pace with the rapid growth of cryptocurrency development. This is complicated because of the decentralized nature cryptocurrency. There is disagreement across borders about the legitimacy of currency status or whether they should become illegal.
China is one market that has imposed tight regulations that have impacted prices. The country blocked citizens from accessing websites offering cryptocurrency trading services in February 2018. This prompted a 15% plunge in Bitcoin and a 20% plunge in Ether. New South Korean legislation, which requires traders to reveal their identities, also affected Bitcoin's price in January 2018.
There are more than 2,000 cryptocurrencies available to trade, as of November 2018. As a result of more cryptocurrencies entering the market, and supported by faster and better networks, the status and stability of existing coins may be under threat. As an example, TRON (TRX)'s network transaction value was higher than that of larger market-cap cryptocurrency like Bitcoin and Ether. There are more than 900 cryptocurrencies listed as 'deceased by' sources, which shows the fierce competition faced by each cryptocurrency. *
Cryptocurrency trading
Top Tips to Trade Cryptocurrencies
There are many factors you need to consider if trading major cryptocurrencies is something you are interested. Are you able or willing to take high risk? Do you want to add cryptocurrencies to your portfolio or move to a new asset category? Do you prefer a day trading strategy or a long-term position trading strategy? These are some key tips:
1. Choose the trading style that's right for you
Before you can select the coins, the first decision you should make is to decide how you want cryptocurrency to be traded. You need to decide whether to trade via derivatives or use an exchange:
Trading via Derivatives. You can speculate on the price of cryptocurrencies using financial derivatives, such as spread betting, binary options or CFDs. Trading via Exchange: To trade via exchange you need to purchase the assets. You can store tokens in your digital wallet until you are ready to sell. You might have to pay high trading fees. Many crypto exchanges do not have regulatory status. You are not protected if they are hacked. However derivatives platforms like IG have been authorized by the FCA and offer segregated accounts protection.
2. Get a Feel for The Market
The key to understanding trading patterns is to watch them closely. To get a sense of how the market reacts to key events and market news, observe the market for a few more weeks. This will allow you to identify patterns in trading and help you limit losses and maximize your gains.
3. Decide on a Strategy
Day trading is a strategy where trades are opened and closed in a matter of hours. Scalping allows traders to make small profits from large volumes of trades. Trend trading, swing trading and position trading are all options.
To understand each coin, it is essential to stay up-to-date with cryptocurrency news and to observe the trading patterns. crypto Our Guide to Day Trading Bitcoin and Other Cryptocurrencies provides more information.
4. Manage Risks Through Stop Loss and Limit Orders
Trading cryptocurrencies is risky. This is especially true given the volatility of the markets. It is important to establish stop losses and limit order; determine how much you can afford and ensure that your trading plan reflects these decisions.