What Factors Influence the Price of Cryptocurrency Most?

Have you noticed that the different cryptocurrencies have drastically different values? Some cryptocurrencies are priced at thousands of dollars per token, whereas others are worth practically nothing. Knowing some of the factors that influence the price of cryptocurrency most can help demystify it and make it easier for you to understand what’s going on.

Supply vs. Demand

Just like any commodity, the value of cryptocurrencies are based on supply and demand. If demand is high and supply is low, the price of a cryptocurrency will be high. On the other hand if supply is high but demand is low, the price will be low instead.

The demand for a cryptocurrency is tied to factors that affect its popularity. Similarly the supply of a cryptocurrency is based on factors that affect its production.

Cost of Production

Many cryptocurrencies are produced by ‘mining’, and have a limited supply. It is normally more difficult to mine the cryptocurrency as time goes by, and the cost of production…