Blockchains. The cryptocurrency market cap is already top $2

Trillion and they may soon have an impact on the economic,

political, and social lives of all of us in one way or the other.

1.13 Reason for the Volatile Price of Crypto

“I am not a fan of Bitcoin and other Cryptocurrencies, which are not

money, and whose value is highly volatile and based on thin air,”

Trump wrote on Twitter in 2019.

There are many cryptocurrency critics in the market including the

former US president Donald Trump. One of the major reasons is the

extreme volatile price fluctuation of the crypto. Just like any other

stock in the stock exchanges, the price of the cryptocurrencies vary

every day. Though the price fluctuation highly depends upon the

demand and supply of crypto in the market, have you ever wondered

why there would be a hike in demand? Let’s evaluate the

parameters.

1.13.1 Utility

Cryptocurrencies also work as gas or the fuel to run the network with

different consensus mechanisms. Hence, more the adoption of a

Blockchain network in the market, more would be the demand and

higher would be the price.

1.13.2 Limited vs. Unlimited Supply

Cryptocurrencies also come with different types of supplies. While

some have a maximum cap, others do not, and hence, there is some

amount of inflation involved in the crypto world.

1.13.3 Hoarding

Sometimes, certain accounts buy and hold large amount of a

particular crypto artificially raising its price.