The crypto market is the place where you buy and sell cryptocurrencies like Bitcoin. Cryptocurrency prices rise and fall, just as stocks do on a stock exchange. The difference is that cryptocurrencies aren’t physical assets like cash or gold, but digital tokens that represent an opportunity for a return on investment.
The value of a cryptocurrency is determined by supply, demand, and other economic factors. Supply is how much of a cryptocurrency is available to purchase at any given time, and demand is how strongly people want to own it. For example, if Bitcoin has a max supply of 21 million coins, this creates scarcity and may increase its value over time.
Investor sentiment also influences crypto prices, and can be influenced by news and social media. Positive news, such as regulatory approval or technological breakthroughs can drive prices up, while negative news, such as security breaches or governmental crackdowns can cause prices to drop. Finally, large traders, known as whales, can influence prices by making significant trades.
The crypto market is supported by a global network of exchanges where you can buy and sell cryptocurrencies like Bitcoin. You can find hundreds of exchanges on Kriptomat, including centralized (CEX) and decentralized exchanges (DEX). Centralized exchanges are backed by a company that facilitates transactions between a crypto buyer and seller, and tend to be more popular with beginning investors. Decentralized exchanges, on the other hand, allow you to buy and sell cryptocurrencies directly with other users. They typically offer greater privacy and lower transaction fees, but can be more difficult to navigate.