Popular Cryptocurrencies Real-time Exchange Rates

What is cryptocurrency?

Cryptocurrency is a type of digital money that can be used to buy goods and services or exchanged for traditional currencies like dollars or rubles, depending on the regulations. The first cryptocurrency was created using blockchain technology, marking the advent of digital money. Currently, there are about 1,500 different cryptocurrencies, though many are low in value or offered for free. The top 20 tokens have substantial market value.

What is the cryptocurrency rate?

The rate of a specific coin refers to its value at a given time and can be represented on a graph showing its fluctuations. This graph is influenced by various factors, including news from the manufacturer, analyst reports, and supply and demand levels. You can view the actual graph, including its status over a chosen time period, on relevant websites. These rate changes, or quotes, play a crucial role in shaping the decisions of traders and investors.

The main factors influencing the price of cryptocurrencies

The most popular companies saw their income levels soar by hundreds of percent, creating significant profit opportunities for investors and depositors. This remarkable surge in stock prices led to an unprecedented increase in interest from both casual investors and professionals. However, it's important to recognize that the crypto market is highly volatile; the value of a given token can fluctuate dramatically within a week. Despite this volatility, some aspects of the rate can be somewhat predicted. Experts identify several key factors that are considered crucial for forecasting these changes.

News from official and unofficial media

Modern mass media frequently serve as a tool for influencing public opinion, particularly in shaping short-term forecasts from unreliable analysts. As a result, it’s important to approach any site or forum with a healthy dose of skepticism. Pay close attention to the reputation of the online resource and assess its expertise in tracking various cryptocurrencies.

News is generally categorized into political and systemic types. Political news might cover issues like a government's ban on withdrawing a particular cryptocurrency. Systemic news includes updates on changes to specific exchanges or market conditions within a country. It’s crucial to differentiate between genuine news and articles designed to manipulate public opinion.

Panic factor

We've discussed how media can manipulate opinions. By instilling doubts, uncertainty, and fear, the market and exchange rates can experience significant volatility, causing sharp fluctuations in coin values. When public sentiment shifts, people may rush to buy or sell popular tokens. To navigate this effectively, it's wise to think independently rather than following the crowd. This approach allows for better analysis of current exchange rates and more accurate forecasting for days, months, or even longer periods.

Technical innovations

New platforms that capture investor interest frequently emerge online. Innovative features often contribute positively to long-term rate growth. The cryptocurrency market's potential growth is closely tied to technological advancements. Initially, major companies aimed for decentralization, privacy, secure transactions, fast money transfers, and minimal or no fees. These goals continue to draw a significant number of potential community members.

Correlation of rates of different tokens

Examining the history and trends of currency pairs or coins from various companies often reveals their interconnections. For instance, altcoin price charts typically show a correlation with Bitcoin, the longstanding leader in the crypto market. It's widely believed that when Bitcoin's price rises, it boosts demand for alternative cryptocurrencies as well. Additionally, there may be instances where users sell their altcoins to buy Bitcoin.

Appeals from politicians and legislators

States or politicians might announce changes to the exchange rate of a specific currency or cryptocurrency. Such statements can sometimes cause significant disruptions in the cryptocurrency market. For example, a government might announce the imminent shutdown of an exchange, leading to a sudden withdrawal of funds. It's essential to scrutinize these announcements carefully, as they can sometimes be designed to manipulate public opinion. News reports might be biased or even false, so evaluating each message critically is crucial. Additionally, keeping an eye on cryptocurrency regulations within a particular country can be beneficial.

Public support

The market is significantly influenced by entrepreneurs and their enthusiasm for adopting blockchain technologies. Mining also plays a role in boosting the popularity of cryptocurrencies. When businesses utilize cryptocurrency for transactions, investments, and other financial activities, it drives the growth of the digital coin market. Higher demand for these assets generally leads to increased rates and improved performance statistics.

Competition between crypto companies

Currently, there are 1,500 officially registered companies that have launched their own cryptocurrency products. It's expected that many more startups will enter the market in 2021. As new, faster, and more efficient technologies emerge, they will influence the demand for various tokens. While Bitcoin remains a leading player, its technology is increasingly seen as outdated. Technological advancement is inevitable, and more modern solutions are likely to emerge. Even social networks are beginning to announce their own cryptocurrencies, such as Libra from Facebook.

User safety

It's no surprise that scammers target cryptocurrency rates, as they frequently attempt to hack accounts and exchanges. Each platform can become a target for cybercriminals. If they successfully breach a service's security, it could result in significant losses for many investors. In theory, a major exchange being hacked could trigger a market collapse. However, the presence of numerous exchanges and wallets across the cryptocurrency market helps distribute assets, which can mitigate the impact of such security breaches.

How does the BTC rate affect altcoins?

It's well-known that the value of altcoins often heavily relies on the actions of major market players. Currently, Bitcoin holds a dominant position, and it sometimes appears that the prices of other cryptocurrencies closely follow Bitcoin's trends. Let's explore what drives this correlation.

Competition in the domestic market

By examining growth trends, it's clear that altcoin values often depend on Bitcoin and other major market players. This is partly because investors seek to diversify their portfolios by investing in various cryptocurrencies. When Bitcoin experiences a surge, investors tend to buy other tokens as well, and similarly, widespread panic selling of Bitcoin can lead to a sell-off of other cryptocurrencies.

What causes volatility?

Market fluctuations in the value of financial instruments are common, with rates constantly shifting due to several factors:

There is no inherent value in cryptocurrency that can be easily assessed. Unlike shares of a company, where you can determine the value of one share by dividing the total market price by the number of shares, this approach doesn’t apply to cryptocurrencies.

• 1. Human factor. The market draws many inexperienced traders and investors, making it nearly impossible to predict the price movements of many newly launched coins. The success of specific projects remains uncertain, and inexperienced participants often make impulsive decisions, buying and selling tokens unnecessarily. As a result, forecasting price trends can be extremely challenging.
• 2. Lack of government regulation. Unlike traditional currencies, cryptocurrency is decentralized and its value is driven by fluctuations in buyer demand. Traditional currencies are backed by the value of natural resources like gold or oil; as the price of these resources rises, so does the value of currencies such as the dollar, ruble, or hryvnia. In contrast, the value of cryptocurrencies is determined solely by market dynamics.
• 3. Is it possible to predict the rate of a digital asset? Predicting the rate of a digital asset is somewhat feasible for well-established cryptocurrencies with a proven track record. However, this does not apply to newer cryptocurrencies, where the value is primarily influenced by supply and demand dynamics.

What Affects Altcoin Volatility?

While Bitcoin has many alternatives, these often exhibit much higher volatility. Predicting their value can be relatively straightforward because their prices are closely linked to the value and liquidity of Bitcoin.

If an altcoin is supported by a reputable company with consistent growth, it can function similarly to a stock. As a result, many investors buy tokens from promising organizations in hopes of their value increasing, which can sometimes lead to significant profits.

It's important to note that the value of major cryptocurrencies is influenced by these factors. Large holders of Bitcoin can manipulate market sentiment for their gain, and global events also impact prices. For example, Bitcoin's value experienced notable fluctuations during the coronavirus pandemic.

When analyzing cryptocurrencies, it's advisable to not only read expert analyses but also develop the ability to identify market manipulations on your own. This skill will enhance your ability to forecast cryptocurrency values more effectively.