What are the factors that cause changes in the price of cryptocurrencies?

From the beginning of the digital currency, people have been discussing its crazy price fluctuations. Experts in the financial market said they did not understand the reasons for price fluctuations in digital cryptocurrencies such as bitcoin. However, people in the currency circle have always been calm: because they understand the underlying technologies of cryptocurrency and their value, they can see their development process, so they are not worried about sharp price fluctuations.

So we saw what most people think: Outsiders are careful and careful, especially those in financial markets. The people in the circle are optimistic. As early as 2012-2013, some people replaced all their assets with Bitcoin. Looking back now, it does require great courage and extraordinary courage.

So, why does the price of cryptocurrencies fluctuate so much compared to other financial assets and legal currencies? Here are the three main reasons.

1. The regulatory loophole is relatively large

There are large regulatory loopholes in cryptocurrencies, which is the main reason for their price instability. Bitcoin is like this, especially for more Altcoins. For example, Jet coin, every new technology product, has both technical and ethical issues. From a technical perspective, no matter who is There is no problem with emerging technologies that use blockchains at will, but if these technologies are used for some illegal purposes, it is clear that any country or organization is unacceptable.

2. A large number of speculative bubbles enter the market

Speculative bubble is the second cause of instability in cryptocurrency prices. Although from a technical point of view, cryptocurrencies such as bitcoin, litecoin, Ethereum, and CryptoCarbon are not scams that others think, but are cryptocurrencies that have real technical value and financial value.

3. Immature technology

The third reason for the instability of the cryptocurrency price is that its current underlying technology is still too young to stabilize the price in a reasonable area.

Finally, summing up the reasons for the price instability in price currencies is mainly the impact of the above three points on their price fluctuations.