What the cryptocurrency exchange rate depends on (not just in Bitcoin ATM)

‍The economics ofsupply and demand

The more something is available, the less it is valued. The total supply of a cryptocurrency partly determines the price of the cryptocurrency. The greater the supply of a currency, the greater the selling pressure will be and the lower its price.

But if you've been watching the cryptocurrency market as long as we have, you probably know that this may not always be true. There are coins with unlimited supply, such as in the case of Ethereum, which have gained more than 1000% in a short period of time. So, to get a clearer picture of a coin's price potential, look at total supply, circulating supply and market capitalization as one system.

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What is the value of the solution to the problem offered by the project

The technology behind the project and its use case are other important factors to consider. If you want to know if a token is worth your time, ask the question: what is the real problem behind the project and its solution with a token? If a cryptocurrency or token is backed by solid technology, it will naturally attract people to buy it, thus increasing demand and subsequently its price.

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A nascent market and new investors

The exchange has a history of more than 200 years. Compared to that, cryptocurrencies are relatively new, so speculation and volatility are high in the crypto markets. Traders and investors "buy the hole" in the blink of an eye.

The crypto industry is a tree compared to the stock market giant, but therein lies the potential. Only 100 million people or 2.14% of the 4.66 billion Internet users currently use cryptocurrencies. The number was only about 50 million in 2019. In terms of market, massively adopted exchanges have a global market capitalization of $93 trillion, while lesser-known crypto already has a total market capitalization of $1.8 trillion. As cryptocurrency adoption increases, there will be an additional increase in demand for it.

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Social media frenzy

This is a relatively new trend stimulated by the growing trading communities on social media. When users of the r/WallStreetBets subreddit boosted GameStop (NYSE: GME) stock by 30 times its opening price in January this year, they made history. For the first time, traders rallied on social media to trigger an artificial short squeeze, driving up GME's stock price.

Crypto is no exception to this trend, as #CryptoTwitter is famous for similar activities. Tweets from Tesla and SpaceX founder Elon Musk were able to send the DOGE meme coin into space - up to 11,000% of its initial value. However, there are many ways in which social media can help price a crypto project. Throughout the chaos, information can be found. Social observations and sentiment can be used to assess the strength of a project's community.

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New improvements

We now come to the last and most important factor that keeps a crypto project alive: the size of the developer community and sustainability. Innovation and development are the heart and soul of a crypto project. 

Without new solutions, the project can be considered dead. Whether it's a second-layer scaling solution or an aggregate privacy suite, every successful crypto project has made progress in its development.

Cryptocurrencies are highly volatile, and their prices can often fluctuate. But this has not discouraged new people from investing in cryptocurrencies. All of the above factors contribute to determining the price of crypto in the long run.