• Tue. Jul 23rd, 2024

How Does Cryptocurrency Gain Value?

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Cryptocurrency has evolved tremendously throughout the past years. It has become a game-changer for various sectors, including healthcare, supply chain, and shipping. In addition to that, it allows new economic activities seeing that there are no intermediaries like financial institutions. That said, it is possible to become rich through investing in digital currencies. For this reason, it has attracted most investors to multiply their money.


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Cryptocurrency Exchange

Traders purchase and sell cryptocurrencies like one would buy and sell company shares. Buying stocks gives you ownership in an organization. Similarly, buying tokens gives you ownership of that digital currency. It shows how traders make money.

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How does it gain value?

The value of cryptocurrency is affected by the following things:

Circulating supply


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Supply plays a vital role in determining the price of an asset. Circulating supply means the number of digital currency tokens or coins available publicly and circulating in the market. Cryptocurrency circulating supply can either increase or decrease. Moreover, it depends on the coins mined and the current number of users who want to sell their coins.

The market demand

Demand increases due to media coverage or if a coin becomes popular worldwide. Suppose a coin’s demand is too high and limited supply, the price increases. On the other hand, the prices fall if the crypto has low demand and is available.

Cost of production

The cost of production affects the price like any other commodity. For example, production costs involve electricity needed to mine, infrastructure, and the difficulty level of the algorithm.

Competing cryptocurrencies

Many coins are emerging today. Therefore, there is a lot of competition. Competing cryptocurrencies attract investors hence increasing the market value.

The value of cryptocurrency

Cryptocurrency is volatile, but you can make profits if you learn to increase value. The current market cap of cryptocurrencies is $2.04 trillion. Bitcoin has the highest market cap of around $812 billion, Ethereum has $405, Tether has $78 billion, and Binance has $78 billion.

How to increase the value of your cryptocurrency

Users can increase cryptocurrency value in the following ways:

· Buy low and sell high: users can use strategies to buy, hold coins and sell when the prices increase.

· Mining: Mining is profitable because it plays a vital role in supplying cryptocurrencies.

· Lending: you can use platforms like Gate.io to lend tokens and earn interest in return.

· Mainstream media coverage: when the media covers positive news about crypto, the value increases.

Invest in Crypto on Gate.io

If you want to increase the value of your asset, you should use a safe and reliable platform like Gate.io to invest. Gate.io has been operating since 2013 and has placed its focus on the growing international market. It is a popular trading platform with a high volume of crypto that currently supports more than 1000+ currencies in close to 1700+ markets. Besides that, it allows you to earn a passive income through lending, leverage, quantitative trading, and contract trading. Furthermore, the platform offers the lowest trading fees. It has also invested in security features to protect your assets.

Conclusion

You can make huge profits while investing in cryptocurrencies. However, you can also make losses because digital currency is highly volatile. For this reason, it is good to invest what you can lose. If you want to trade on cryptocurrencies, Gate.io offers hundreds of coins, including stable ones to invest in.


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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.