Cryptocurrency rates: from reality to fake news

15.11.2017 | 10:34 Home / News / Fintech /
#Cryptocurrency #bitcoin
Bitcoin rate experienced drastic changes since early November, growing by USD 1000 in mere days and then dropping by over USD 1600. The bitcoin to dollar rate made USD 6,500 on November 1 and USD 7,500 on November 5, only to fall down to USD 5,900 on November 12. Now it’s on the rise again.

TASS news agency published an explanation for what defines the cryptocurrency rates. We offer the most noteworthy excerpts from the article.

What defines cryptocurrency rate?

Only demand has any influence on the cryptocurrency rate. Cryptocurrencies have no connections with other currencies, oil prices, or assets. The digital coin needs to be bought in order to obtain and increase its price. The same is true in the opposite case: when investors run mass sales of a cryptocurrency, its rate drops.

What influences the demand and prices?

Cryptocurrency rates can be affected by the currency’s strengthened position in the real world. In the spring of 2017, bitcoin had a substantial increase of rate (in some periods it grew by USD 100-200 every day). Experts explain that by the inflow of traders from Asia. Japan adopted a law on legalization of cryptocurrency (the first country to do so) and investors who used to be suspicious of the risk began using bitcoin with confidence.

Meanwhile, news on bans of cryptocurrency and ICO in several large countries lead to widespread and simultaneous decrease of rates.

Small cryptocurrencies depend heavily on public opinion. In particular, in the spring of 2017 Ethereum rate dropped substantially because of the false news about the death of its creator Vitalik Buterin. Buterin refuted the rumors in social networks on the following day and the Ethereum rate was restored.

As for the bitcoin collapse we saw in November, it was caused by traders who converted money to bitcoin cash. The classic bitcoin has two independent “affiliates”, Bitcoin Gold and Bitcoin Cash. The latter had a 40% rate growth in just one weekend.

“Whatever you pay for the bitcoin, you need to understand that you can lose thousands of dollars in the first few weeks (or even days) as easily as earn them,” TASS reports.

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