Since the invention of Bitcoin, developers have created thousands of other cryptocurrencies. Each developer comes up with crypto to solve an existing problem in the crypto world.
As more cryptos are being developed, more people get diversity in what they can choose from and use them to bet at the best online casino.
A few things will influence the demand for given crypto. This article discusses some of these factors.
Value of the Cryptocurrency
Many people treat cryptocurrency as an investment. They intend to get value for their investment. Therefore, the perceived value of given crypto will influence the number of people who invest in it.
The higher the value, the more people will want to buy a cryptocurrency. People believe that if an asset is costly, the returns will be higher during selling. Cryptocurrency acts as a digital asset that people trade with.
Media Coverage
The mainstream media plays an essential role in the number of people that invest in given crypto. The media can help increase the demand or make many people withdraw from cryptocurrency investments.
Most developers use the media to push their agenda. They engage with the people behind crypto to promote it. The more coverage, the chances of increased demand for crypto.
Government Regulation
The government can affect the demand for given crypto in one way or the other. Taxation is one of the ways. The government applies taxation on cryptocurrency only when converting the crypto to fiat currency. Some people will refrain from investing with that crypto if the taxes are increased.
Most governments are yet to legalize cryptocurrency in their countries. Other governments have banned the use of cryptocurrency. When a government bans crypto in its country, the people already using crypto will be affected. Once they stop transacting with crypto, the demand for that crypto will fall in that country, affecting the collective demand.
Safety
The safety of given crypto is vital for its demand. People always consider the security of their funds before investing in cryptocurrency. If crypto is prone to insecurities like hacking, its demand will be low.
Safety is one of the factors that developers put into consideration when creating crypto. They want to solve that problem for the existing crypto users.
Competition
As already stated, thousands of cryptocurrencies exist. These digital currencies are supplementary. Any of them can serve the same functions.
Therefore, competition among different cryptos affects their demand in one way or the other. When a developer(s) creates new crypto, they will attract some investors, most of whom are already crypto users. Therefore, it means that some people will shift from one cryptocurrency to the other, leading to a change in demand on both sides.
Social Media
Social media has greatly impacted our lives, especially in the information sector. Many people consume information through social media platforms like Facebook, Instagram, TikTok, and Twitter.
People with many followers on these platforms gain from business people, including crypto developers. These developers partner with social media influencers to push their agenda. The influencers promote given crypto on their social media handles, which can lead to increased demand for the crypto.
Inflation
Although hard capping protects cryptocurrency from inflation, cryptocurrency is still volatile. The value of crypto fluctuates from time to time. This is the reason why people engage in trading with cryptocurrency.
An increase and decrease in the value may affect the demand for crypto. If the value of given crypto keeps rising, its demand will increase too.
Scarcity
If an asset is scarce, its value always rises with time. The same applies to some cryptocurrencies. An example is Bitcoin which has a hard cap on the number of coins in circulation. Bitcoin has a set number of 21 million coins that will ever be in circulation.
This scarce nature of bitcoin tends to make it the highest-valued cryptocurrency in the market. Its high value has kept its demand high.
Conclusion
Cryptocurrency is a digital asset. All assets have common factors that affect their demand and supply in the market. This article has explored some factors influencing the demand for a given type of cryptocurrency. Do further research to gather more information.
