Apr 14, 2019 23:30 UTC
Apr 30, 2019 at 08:49 UTC
How Does Cryptocurrency Value Affect Its Price?
Because the crypto market is extremely volatile and the price of Bitcoin moves so much, we end up discussing about crypto indicators far too often. The crypto price discussion in particular is proving to be immensely frequent, considering all the changes that keep on occuring. Now, you must have wondered at some point, is crypto value same as crypto price? If not, how does the value of cryptocurrency affect its price?
If you have indeed thought about this, then this is where you get your answer. Before we dive too deep into answering the question, it is imperative to know the background of it, what cryptocurrency value is, what its price is and how they are correlate to one another.
What is Cryptocurrency Value?
The value of a cryptocurrency refers to what importance or worth it holds for a person owning one or more of units of that particular cryptocurrency.
Value depends on to what extent the user thinks he or she will be able to benefit from that particular crypto coin or token.
What we must bear in mind, is that the value of anything is very subjective in nature: it varies from one user to another.
For a crypto enthusiast, a Bitcoin may be incredibly valuable but if the same Bitcoin ends up in the hands of an unaware and uninformed crypto layman somewhere, it will have no value.
What is Cryptocurrency Price?
The price of cryptocurrency is the amount you are going to pay to have it in your possession. It is the amount that the seller is ready to accept, and you, as the buyer, are ready to pay. The price of cryptocurrency depends on a very large number of factors, including what we learn from the very foundation of economics: on demand and supply.
You May Also Read: What Drives Bitcoin Price?
How Are Crypto Value and Price Related?
As we have mentioned above, the price of cryptocurrency is dependent on a multitude of factors, ranging from demand and supply to market sentiments.
Then how does the value affect it? Well, value, or perceived worth, happens to be one of the several important factors that determine the price of any cryptocurrency.
The two indicators are positively correlated, which means that the price can be expected to rise if the value of a crypto increases. However, such a rise may not necessarily be in the same rate.
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