Factors Influencing Crypto Prices

Like any financial market, the crypto market operates on the foundational principle of supply and demand. Prices of cryptocurrencies fluctuate based on how much is available (supply) and how many people want to buy it (demand).

Unlike stocks or commodities, which derive value from intrinsic assets or revenues, cryptocurrencies rely largely on speculation and the public’s perception of their future value. Speculation is integral to the crypto market, contributing to its dynamism and growth.

Cryptocurrencies are famously volatile, and the complex forces shaping their prices include not only supply and demand but also news cycles, geopolitical events, and broader economic trends. From regulatory announcements to international conflicts, major events worldwide have an almost immediate impact on cryptocurrency prices. 

In recent years, cryptocurrencies and traditional financial markets have increasingly shown a curious relationship: their prices have started to move in tandem more often. But why do these volatile digital assets, designed to be independent, often mirror the behavior of traditional markets?