The cryptocurrency market has continued to display conspicuous levels of activity from over the years, characterized by a number of stable and unstable traits. These events have culminated into certainly defined indices that are now used in gauging the progress level of the overall decentralized technology, as well as a pointer to what can be expected in the future. One of the most importantly utilized indices on the digital currency scene is the price trend of bitcoin and the other individual altcoins. Consequently, this index provides a number of inferable information that enables users to know how the pricing is affecting or could affect other components of the overall technology. such as their adoption as means of transaction, or investors’ choice for investment purposes.
Before venturing into cryptocurrency usage or profit-oriented investments, it is important to take a detailed analysis of what the graphs look like, so that the intending participants would be able to come to an appropriate decision, that best suits them individually.
How The Cryptocurrency Prices Affect Participating Stakeholders
Cryptocurrency pricing broadly affects two categories of participating stakeholders. They are the users who are basically utilizing the coins and tokens for transaction payments, and those who are holding onto the digital assets for investment and speculative reasons.
However, the individual categories seem to be affected variously, and it is possible to find out that while price fluctuation is grossly detested by the transaction payment user, it may be the very thing upon which the investor is leveraging on.
For instance, persons who have adopted bitcoin as a means of making (and receiving) their business transaction payments, may tend to run into profit or even capital loss, if bitcoin prices suddenly drop considerably below what it used to be. This volatility trend is most likely not the type that a business person would desire in an adopted legal tender.
The crypto asset investor, on the other hand, benefits from cryptocurrency price fluctuations by buying when the prices dip, and then selling out when the prices rise. By this, they are able to make calculated profits depending on the level of price instability.
However, an overall price tendency could be effectively calculated using price ratio from a specified period of time to another. Hence, although the graph lines are going up and down, we can be able to say if there was a real price appreciation or decline, after the stipulated time period.
General cryptocurrency price characteristics from the last year
The year 2017 was naturally the year for the cryptocurrency, and it was adequately marked by a gradual and then rapid surge in market capitalization. Virtually all of the existing cryptos experienced astronomical price surges. The overall market cap rose up-to over $650 billion dollars as at December 16, 2017, from an initial capitalization that was placed at a little over $150 billion as at August ending.
The last quarter of 2011 has entered the record books, as the period when cryptocurrencies generally experienced a price surge like none that has ever been- both before, and after the time. This is most likely explained by a common explanation which rightly suggests that there were a lot more cryptocurrency users and investors joining the overall community. Hence, demand for cryptocurrencies- especially the top-ranked ones like Bitcoin, Ethereum, Litecoin, and some others rose significantly. This demand was largely facilitated by the proliferation of ICO crowdfunding events requiring intending investors to make their donations in already established cryptocurrencies- especially in bitcoin and Ethereum. Since investors needed to buy these currencies for their investment activities, there was a corresponding reduction in commensurate supply, thus allowing the price hikes.
Bitcoin price rose steadily from a little over $4,000 (and a support of about $3,800) as at September 2017 ending, to an all-time high of over $19,200 in about two and a half months. This represents a price rise of over 450%. At this time, a lot of investors raked in massive profits, from crypto sales. This was probably a reason why a lot more people were surprised when the prices suddenly began to slid down towards the last two weeks in December. Bitcoin price dropped down to about $12,000 by year-end and continued on a bearish turn into the new year 2018. As at February, the prices had come as low as $6,800 dollars and was just struggling to build a support at about this price. The highest it has reached after that was a little above $11,000 in March 2018. Prices dropped down again and have remained within the range of $6,000 to a little above $9,000. Recently, price fluctuations have been influenced by such factors as proposed exchange-traded funds (ETFs), or fear uncertainty and doubts (as created by media), amongst others.
But then considering bitcoin price at the start of September 2017 (before the real hikes), and what it is now (well over $6,000), we can estimate a valid price growth of a little over 150% standard.
Ethereum on another hand also experienced a surge in demand (and consequently, price), during the 2017 boom era. Since most smart contracts and dApps were built on the network, investors and users of all the various protocols hosted on the networks, required their investors to contribute in Ethereum. This helped Ethereum skyrocket prices from about $380 in September 2017 to an all-time high of over $1,300 in January 2018. It’s decline (as with most other cryptocurrencies, also followed a similar decline pattern to that of bitcoin).
Currently (the first week of September 2018), Ethereum has shown an enormous decline of over 80% when compared to its all-time high. Furthermore, it is estimated to have declined by over 30% of its selling price at about this time in 2017.
On the overall, many coins experienced price surge ranging to thousands percent rise. For instance, Ripple was estimated to have risen by over 35,000% during the last quarter of 2017, until the first two months of the year. Litecoin also rose by over 5,500% during this period, amongst others.
The cryptocurrency market is characteristically very volatile and quite unpredictable. Usually, price trends are determined by specific factors, and this is the reason why the investor must watch out for important events that could affect the markets.
Even at this time, we cannot yet conclude on what the charts would look like at the close of the year, hence, a need for investors to play by the safest rules.