How cryptocurrency is valued?

How cryptocurrency is valued

How cryptocurrency is valued?

As with anything else in the world of economy, cryptocurrency has value because of market demand. Unlike fiat money, cryptocurrencies have prespecified market capitalization figures. This guarantees that as demand for them rises, so does the value since there is no supply change to temper the price.

There are other factors however that comes into play to push the value in either direction. These include the amount of energy and difficulty level associated with mining, increasing utility for various tokens, the general public perception and the activity of major investors on the scene.

Digital currencies have a reputation for volatility. This is because speculation is one of the biggest forces that determine its value. Any updates and developments brought to light by the media have an effect on the prices.