1. Supply and demand: As with any asset, supply and demand has a major effect on the value of cryptocurrency. When more people are buying than selling, prices go up; when more people are selling than buying, prices go down.
2. Utility: The use cases of a particular cryptocurrency will also have a direct effect on its price. Cryptocurrencies with more utility tend to be adopted more widely, leading to higher market capitalization and greater demand for them.
3. Market sentiment: Investors’ sentiment and overall confidence in the asset class can greatly impact the price of cryptocurrencies. If sentiment is negative and investors fear a crash, they may be more likely to sell their holdings, leading to lower prices.
4. Regulatory developments: Regulations can have a big impact on the value of cryptocurrencies. For example, if governments move to regulate cryptocurrencies or put restrictions on their use, this could dampen their appeal and lead to lower prices.