Essential crypto influences

Essential crypto influences

The crypto market, more than any other market, is subject to our opinion of it. This is because most cryptos do not have any ties with more stable assets, like gold. Overall, this means that a crypto’s value is all in the eye of the beholder. Thus, the crypto market becomes highly volatile, as peoples’ opinions tend to change on a dime. Therefore, if you want to look into investing in cryptocurrencies, understanding its influences is essential.

The news

The news is one of the most essential influences for any financial market. The crypto market is no exception, in this case. Economic news is the most relevant one, as one would expect. This kind of news can thus inform traders of the overall performance of the economy. This, in turn, will have consequences on how people invest. If there is more economic instability, people may start investing more in cryptocurrencies, for example. This is because some view cryptocurrencies as potential safe-haven assets. This is because of its ties to other assets. It could also have the opposite reaction. It’s best to judge these situations on a case-by-case basis. Just because one cryptocurrency moves in a direction in one way, does not mean they all will.

Political news is also vital. For one, politics can have an enormous effect on the performance of the economy. This ties in directly with what we said before. What’s more though, these days, governments discuss cryptos quite heavily. There is a ton of speculation surrounding them, and no-one quite knows where to go with them. Still, political news on crypto policy can have a significant say in the crypto market. The more countries start allowing cryptos, the higher up its price goes. Such policies could also be about the potential infrastructures countries could start building for cryptos. This, again, would likely drive up prices, as people get more confident in the crypto market’s future.

Next time, we will explore even more of these influences.

 

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