There are several factors that influence cryptocurrency prices. First, public sentiment influences prices. There are also supply and demand factors. And third, there are speculative investors. There is also the Bitcoin/Bitcoin Cash Split. These factors have a significant impact on cryptocurrency prices. This article will discuss them.
Influence of public sentiment on cryptocurrency prices
The influence of public sentiment on cryptocurrency prices is an area of growing interest. Recent studies have demonstrated that the volatility of social media posts can be an important indicator of price change. Researchers can use Twitter sentiment to determine if a cryptocurrency is likely to increase or decrease in value.
Supply and demand
The most important factor in determining how much cryptocurrency will cost is supply and demand. When the demand for a particular cryptocurrency rises faster than the supply, the price will go up. This is similar to what happens to grain or produces when a drought affects a certain region. The demand for a particular cryptocurrency will increase in value as it becomes more widely accepted by businesses and the general public.
Speculative investors
Speculative investors are people who buy cryptocurrency without understanding the details. These investors base their decisions on opinions, which increases risk and increases emotional bias. This can lead to disastrous investment decisions. Over the years, cryptocurrency prices have fluctuated greatly.
Bitcoin/Bitcoin Cash split
On August 1, 2017, the Bitcoin/Bitcoin Cash split was made, creating a new cryptocurrency called Bitcoin Cash. Bitcoin Cash is a fork from the original Bitcoin blockchain. It was created to increase transaction speed and scalability. It is very similar to Bitcoin in many aspects, including the fact that it can be spent and a maximum supply limit at 21 million coins. As a result, Bitcoin Cash has quickly become one of the top cryptocurrencies by market capitalization.
Ethereum Merge
Traders have been putting money into Ethereum and other cryptocurrency projects in the last couple of weeks. The open interest in Ethereum options has exceeded that of Bitcoin. They trade for $6.6 billion. According to Ethereum analyst Bill Bons, the coin remains undervalued. While some analysts are speculating that the Ethereum Merge will drive up prices, he calls such narratives false. Ethereum has gained nearly 10% in the past week, after dropping nearly 30% in mid-august.
Unregulated status in the UK
Currently, the unregulated status of cryptocurrency prices in the UK is causing confusion, as the government is not yet able to make decisions on the issue. Despite this, the UK has done a better job of regulating the sector than other democratic countries. However, this is unlikely to change anytime soon, given that there are still no UK regulations on decentralized currencies.