Where does the price of a cryptocurrency even come from?
We must target the root! There are many sources which the coins gain their price and value from, but I have selected what I consider the TOP 3. And they will certainly help you identify why your coins may NOT be appreciating.
People give the coin its value and price, just like any fiduciary money or paper money. Did you know that the US dollar only has its value based on what people believe it is worth? Imagine if the entire world all of a sudden decided to invest in cryptocurrencies leaving the USD behind, the biggest coin reserve in the world, I know it sounds silly, but it would lose its value and price entirely. The same works for cryptos, they have the value WE THE PEOPLE GIVE THEM.
They have value and price because people believe they do. It is a very powerful thing when people are unified by the same belief.
A strong community will directly affect the appreciation of a coin, which is why it is not enough to distribute the coin to as many people as possible, these people need to engage with the coin´s community.
Why? You might ask… because a strong community communicates CONFIDENCE.
CONFIDENCE is a basic trait of any currency, it tells the watching audience they should engage too!
CONFIDENCE = APPRECIATION ❤
Developers should always deliver the promises made in the white paper, by doing so they will build solid credibility for the coin. And this will have a direct effect in how well this project will do.
Before engaging into any cryptocurrency project, you must get to know the project: the white paper. You must know exactly what the technology promises, the team behind it, and the developers. Investigate their support team, availability, accessibility and how much they are willing to engage with the partners. Seek to see if they have secure websites, search for reviews, research the project to make sure you know what to expect when they deliver, or when they don’t.
It´s not realistic to expect to see appreciation right away, a project could take years to take off, but here is what you should expect right away, which is for the team and developers to work hard to deliver the promises made.
1. Are they doing their part to deliver what they have promised?
2. How engaged are they with their communities?
3. Are they doing a good job in keeping their partners well informed and up-to-date?
With that said, it might come as a surprise for many that the developers and the team only reflect a percentage of a coin´s appreciation.
Many people sit back and expect for them alone to make it happen, sorry it just doesn’t work that way.
Now, one important thing developers are responsible for is the supply. Having a limited supply gives value and price to a coin because it creates demand.
For example, 100 coins worth 1, 00$ each equals to 100$ Market Cap. If the supply is doubled, 200 will now be worth 0, 50$.
This is the reason many developers burn coins as a reward for their coin holders, like the well-known exchange BINANCE. By burning a portion of the coins they give more value to the coins that are left.
For example, a supply of 200 with a Market cap of 100$ means each coin is worth 0, 50$. If 100 coins are burned the 100 coins left will now be worth 1, 00$. Yes?
You might want to read: What is coin burn?
3# Holder’s TREATMENT OF THE COIN
Truth be told, many holders do not even know they CONTROL a significant part of the price and value of a coin, and for that reason, they feel very comfortable trading their coins in any manner.
Dear holders: You may have thought it was enough contribution to the community owning some coins, but how you trade matters, how you sell matters, how you buy matters.
Did you know you should always sell your coins for MORE than what you have paid? When holders sell their coins for more than they have paid the coin APPRECIATES.
One fast way to decline a coin is to sell it for less than the price purchased.
When this starts to happen in mass the coin DEPRECIATES drastically, probably more than by any other factor.
The decline of a coin usually shows the sentiment of its community, and this usually happens a) because of a lack of information, as I have mentioned above holders do not know how much they control the price of a coin, and so they treat it in any manner; b) because they could be discontent with the community and or the developers, then, in this case, it´s reasonable, and holders should communicate his or her discontentment to the team; c)because they become fearful due to the volatility, which is understandable but it probably means they do not understand the psychology behind the trading industry.
If you believe in a new project it is important to hold on to the coins during downfalls, maintain a firm sentiment, trace a plan and stick to it, trade consciously and not emotionally.
Seek to understand the psychology behind trading, cryptocurrency, charts and price listings to be able to act accordingly in the trading field.
Coin appreciation is a very important part of any cryptocurrency, but we cannot jump steps, if we want to conquer a successful coin we must do our part, appreciation comes from a collaboration of all parties involved.
The value and price of a cryptocurrency reflect the community, the developers and the team unified in the same confidence about a singular project.
WANT TO BE PROACTIVE!?
You can start now by leaving your comment, your ideas, your opinions and advice, your critiques or by simply dropping some good piece of information to help others within the cryptocurrency community!
Your engagement matters make the choice not to be on the fence.
LET´S DO THIS!