price of bitcoin

What drives the price of Crypto Currencies

Hi Guys,

This is my view of the driving force behind the price of crypto currencies:

  1. First and foremost, NEWS. If a crypto currency is in news, the price either goes upwards or downwards depending on the news being positive or negative. So people who are into trading cryptos always keep an eye for news.
  2. ICOs or Initial coin offerings. Any upcoming ICO drives the price of cryptos which will be accepted in the ICO. Recent example is that of Ethereum. Ethereum price clocked $400+ just before the Bancor ICO.
  3. Addition of cryptos to an exchange. Any time a crypto is added to one of the major exchanges, the price changes. This happens mainly due to an increase in volume of the transactions of this particular crypto. Latest example being Litecoin.
  4. Addition of New features to existing cryptos or their supporting platform drives the price.
  5. Global acceptance of cryptos. An increase in popularity of a crypto or an increase in the usage of a crypto drives the price.

Feel free to add more in the comments section.

Why is the price of bitcoin soaring high?

The biggest question of the year 2017, why is the price of bitcoin soaring high day by day. I guess nobody knows the answer.

If you look at bitcoin, its nothing but an implementation of the blockchain technology. There are 100s of other coins which have come up in recent years which use this technology even more efficiently.

Current problems with bitcoin:

  1. Scalability
  2. High transaction fees
  3. Not many businesses accept bitcoin
  4. Limited number of bitcoins can be mined, 21,000,000.
  5. Slow transaction time.

Now, there are people who justify the price by mentioning its been adapted by lot of companies. But, bear in mind its blockchain that is being adopted and not bitcoin.

I guess the people who are pushing the price of bitcoin do not understand why they are investing in this. Some people are just investing due to its volatile nature and make some profits.

But, the real reason of the price rise is still not clear.