Cryptocurrencies are playing an ever greater role in the way we live our lives, including how we spend our free time online. Increasingly, people are logging on to sites like nolimit casino to enjoy the strategy of blackjack, the thrill of roulette and the entertainment of slots, all while funding their enjoyment using cryptocurrency as a form of payment.
But unlike traditional means of currency, crypto is often subject to volatile price fluctuations, meaning that it can be worth significantly more (or less) one day than it is the next. This can make managing a crypto wallet a difficult endeavor for those who favor the payment system when gambling, shopping and browsing online – so how can they stay abreast of the latest developments in the sector and better understand the factors which affect the market? Here’s a quick run through some of the biggest contributors to the rises and falls of cryptocurrency valuations.
Supply and demand
As with any commodity, a cryptocurrency is only worth what others are willing to pay for it. Some, like Bitcoin, have benefited from the fact that there is a finite supply – some 21 million Bitcoins in total, with around only four million that have yet to be mined. This means that the supply will never increase above that figure, even as demand continues to grow. By contrast, Ripple has a cap of 100 billion XRP coins, over half of which had yet to be mined at the time of writing. This surplus of supply means that Ripple is a lot cheaper than Bitcoin – at least for now.
Regulations
Because it’s a very new technology, there is understandably a considerable amount of hesitancy among the investment community when it comes to trading in cryptocurrencies. As they become more commonplace and widely accepted in society, that trepidation is likely to ebb away in the long term – especially if they come to be formally recognized by national governments. Of course, the inverse is also true, as was recently witnessed with the news that China has banned financial institutions and online payment companies from accepting cryptocurrencies earlier this year. The shockwaves from the announcement saw crypto prices come tumbling down around the globe.
Public perception
It isn’t just a country’s official stance on crypto which can have a huge bearing on its value, either. Public perception of a commodity is shaped by a wide variety of factors, including the views and actions of societal leaders. A prominent example of this kind of factor occurred earlier this year, when tech billionaire and CEO of Tesla Elon Musk said that he would be dropping all use of Bitcoin until the technology behind the currency became more eco-friendly. The ramifications of Musk’s announcement not only put a squeeze on the price of Bitcoin, but also had a knock-on effect on the valuations of almost all other cryptocurrencies, as well.
Due to their volatility and unpredictability, cryptocurrencies can represent a risky investment. However, the factors which affect their fluctuation in price can be clearly traced, allowing savvy investors to make informed decisions on when to buy and sell crypto.