Reblox academy: The cryptocurrency market
A starting point to understand the basics of the cryptocurrency market
To understand how the cryptocurrency market works, we must first understand what a cryptocurrency is. A cryptocurrency is a medium of exchange that is digital, encrypted and decentralized. Unlike the U.S. Dollar or the Euro, there is no central authority that manages and maintains the value of a cryptocurrency. Instead, these tasks are broadly distributed among a cryptocurrency’s users via the internet.
The cryptocurrency market is a subset of the financial industry, where it serves as a medium of exchange for determining the overall dollar worth of cryptocurrencies based on supply and demand.
What moves cryptocurrency markets?
Cryptocurrency markets move according to supply and demand. However, as they are decentralized, they tend to remain free from many of the economic and political concerns that affect traditional currencies. While there is still a lot of uncertainty surrounding cryptocurrencies, the following factors can have a significant impact on their prices:
- Supply: The total number of coins and the rate at which they are released, burned or lost.
- Market capitalization: The value of all the coins in existence and how users perceive this to be developing.
- Press: The way the cryptocurrency is portrayed in the media and how much coverage it is getting.
- Integration: The extent to which the cryptocurrency easily integrates into existing infrastructure such as e-commerce payment systems.
- Key events: Major events such as regulatory updates, security breaches and economic setbacks.
What is the Market Capitalization
Crypto market capitalization is the total value of a cryptocurrency. Where stock market capitalization is calculated by multiplying share price times shares outstanding, crypto market capitalization is calculated by multiplying the price of the cryptocurrency by the number of coins in circulation
In the stock market, knowing a company’s market capitalization classifies it into an investment category: Small-cap, Mid-cap, or Large-cap. An investor might choose to divide their investment into these groups for different reasons, so knowing the market cap is important.
Market cap is often used to refer to how much a company is worth, and this value can be reflected in how risky it is to invest in the company. Large-cap stocks are often less risky, but slower-growing than mid or small-cap stocks.
The future of cryptocurrencies
We can see an interesting development in the cryptocurrency market, where ease of adoption and utility will be crucial for the success of the technology.
Stablecoins are one of the emerging trends that aim to overcome cryptocurrency adoption difficulties. Its price stability provides a great alternative to fiat money and it also maintains all the benefits of any other cryptocurrency.
There are new developments appearing almost every week in the crypto landscape, such as NFTs, gaming, traceability, lending protocols, and more. This is a clear sign of the power of this revolutionary technology, which will continue to bring new innovations that increasingly tend to generate real-world applications.
Reblox is actively involved in new blockchain developments for newborn cryptocurrency protocols, as well as the creation of new tokens for use in the cryptocurrency market.
We have a talented and experienced team ready to help you transform your idea into a real project. And if you have a project that is already running, we can help you add blockchain solutions to improve your operations.
Are you ready to enter the blockchain? Contact us at business@rebloxsolutions.com
