There was a very bad period for people in need of graphics cards and that was the entirety of 2017 and parts of 2018. People figured out that they could mine Ethereum, a cryptocurrency, using graphics cards, specifically mid range ones, mostly from AMD (albeit, once done with mid range AMD cards, they bought all the Nvidia ones, as well).
Bitcoin and other cryptocurrencies, after a long period of domination and extremely high prices, had a serious crash in 2018. They dropped their value by 75%, which is very, very much. People who sat on Bitcoins lost a lot of money. Following that abyssal drop, the IT market was flooded with used mining cards, to the benefit of PC builders on a budget.
Bitcoin recently had a surge of 22% which was a sign to some people that it might be making a comeback? Will cryptocurrencies reach their value of 2017?
Things Affecting the Price of a Cryptocurrency
Cryptocurrencies are not immune to outside factors. They are defined by them, so their price is basically set by people. Here are the most important factors affecting cryptocurrencies.
See, for cryptocurrencies like Bitcoin, which is a proof-of-work cryptocurrency, the more people mining it, the more difficult it is to get a coin. The more difficult it is to get a coin, the pricier it gets. It is as simple as the coin’s perceived price rising due to the difficulty of obtaining one via mining. But, a coin’s perceived price is unimportant if the coin has no practical value.
Cryptocurrencies are defined by how much you can use them. Bitcoin, being one the first cryptocurrency, holds a very large value in the market, just because of that. You can use Bitcoin everywhere, unlike some newer cryptocurrencies. Ethereum is another one which you can use everywhere. That is why they are the two cryptocurrencies with the highest price, almost universally, at least for now.
If they become unusable, their prices will plummet.
Market Opinions and Updates
News can lower the value of a coin, but they can also bring it up. That also happens in the stock market. A company releases a new product, or several new products, the media hypes it up, people start chattering about it and the company’s value jumps up.
The same thing happens with cryptocurrencies, when experts voice their opinions and the media voice their own, not to mention the people in general.
Supply and Demand
Prices always vary due to supply and demand. If you were the only person with an original Toyota Supra with an unmodified 2JZ engine, your car would be worth at least twice as much as the next best Supra on the market. Prices vary due to supply and demand and cryptocurrencies slot right into that formula.
With Bitcoin’s sudden spike in value, people expected it to rise again, yet these things happen occasionally, according to experts. Will cryptocurrencies retain their dominance of 2017 remains to be seen.