An Introduction to Cryptocurrency Prices

Almost everyone involved in the world of cryptocurrencies is focused on one thing – price. This is natural given the extraordinary gains made by the sector over the years, and in particular certain coins within it, and this has led to people really diving into what makes cryptocurrency prices rise and fall.

In this piece we look at what factors influence the price of a cryptocurrency and see if there is any way to predict a boom or a bust.

Cryptocurrency prices today

Here is a glimpse of how the crypto markets look today:


One question you should be asking is – how can we be sure this data is accurate? We can be very confident of the accuracy of our data because we only get our data from trusted and reputable sources.

However, other sites that don’t have the same standards as us will skimp on their sources, grabbing data from perhaps just one or two exchanges that have little volume and so don’t reflect the wider market.

This is why it’s always advisable to look for metrics sites that, like us, use providers that pull in data from several large exchanges to guarantee much more accurate reporting.

What affects cryptocurrency prices?

There are several things that can affect the price of cryptocurrencies, some of which are driven by internal factors, such as the design and tokenomics of the coin, and some of which are external, relating to the wider crypto market. We’ll look at these in two separate sections.



The ‘supply’ of a coin has two elements – the ‘total supply’ and the ‘circulating supply’. The total supply is the absolute maximum number of coins that will ever be created, and the circulating supply is the amount of coins in circulation right now.

This is important, because if a project has a total supply in the billions but only has a few million in circulation, then the value of the coins will become diluted over time as these billions of coins enter the supply.

Typically speaking, rarity equals higher valuations.


This refers to how coins enter the circulating supply. The key thing to remember is that, as said above, more coins typically means less value per coin. For a project to maintain the value of its coins then, it needs to release its coins into the supply in a slow and steady manner.

Bitcoin achieves this by having a ‘difficulty’ rating which makes it harder to mine if more mining power gets added into the mix, while it also halves the amount of BTC it rewards miners every four years. In this way, it can control the level of inflation taking place with the supply.

Some coins also conduct regular ‘token burns’ if the circulating supply crosses a certain threshold. One example is BNB coin, which experiences quarterly token burns in order to regulate its supply.

The ultimate goal for token holders is to own a deflationary coin, which is a coin that sees its supply actually reduced over time. These are extremely rare in the crypto world, but Ethereum is on the way to reaching this holy grail – soon, more ETH will be burned with every transaction than will be generated by stakers.


Very few crypto projects start from nothing and build up slowly, like Bitcoin did. Most have financial backing from the very outset, and part of the reward for early backers is a portion of the coin supply. These coins are typically locked for anywhere up to five years, at which point they will be released.

Token unlocks like this can, if not managed carefully, result in a huge amount of coins flowing into the market from these early backers who are looking to secure a quick profit. This can crash the price of a token, and if it is known that there are further unlocks to come then this can be damaging for the price until these unlocks are completed.


There are several key factors that can impact the price of a coin which are unrelated to the coin itself. We’ll have a look at these now.


A coin that is in high demand or has a very strong use case can see its price rise rapidly as adoption and popularity grows. Ethereum is a notable example of this – the ICO boom in 2017 almost single handedly drove Ethereum’s 15,000% price increase that year, as it was the only way to invest in them.

There are also cases where the value of coins have been driven up by genuine big-name partnerships, which in turn increases demand in the hope of further such announcements.

The opposite can also be true of course – a coin that has been around for a long time and whose demand and popularity has dwindled will have a hard time replicating earlier gains.


Speculation is the fuel that powers the crypto rocket ship, given that most coins have little or no real world use yet. People buy up any old coin with no knowledge of what it does, simply hoping that it will get hyped up and allow them to sell at a tidy profit.

There is often no rhyme or reason for some coins making thousands of percent gains while others remain rooted to the floor, although market manipulation typically plays a part (see below).

Market Manipulation

We only need to mention Dogecoin to bring this point home. Dogecoin was nothing more than a low-flying crypto community favorite until Elon Musk’s support in 2021 catapulted it into the collective consciousness of the TikTok and Reddit brigades.

A coordinated, and very public, effort was executed to get DOGE to $1, and as a result it leapt from $0.06 to $0.68 in just a few weeks. This was nothing more than market manipulation, with Musk’s involvement used as the catalyst to propel DOGE upwards.

While Musk’s interest was genuine, many coins have pumped in the past after rumors of huge real-world partnerships that failed to materialize. These are often planted by whales who have huge positions and can influence the public narrative to increase their gains and sell at a profit.

2020-2022 – the perfect example

Everybody knows that cryptocurrency prices are down massively from where they were a couple of years ago. This has been due to a combination of factors, some related to crypto and some not, although how long they stay down for will almost certainly be out of the hands of the crypto projects themselves.

The 2020-2022 period is a great example of how multiple factors can work together to impact cryptocurrency prices in both directions. Firstly, by early 2020 crypto had been in a bear market for over two years, which is about as long as a crypto bear market lasts. So the sector was ready for the next move up and, with the Bitcoin halving due that year, the stage was set for the next bull market.

Enter COVID-19. Suddenly, governments were handing out free money and people were stuck at home with nothing to do. It was the perfect storm for crypto, and so it panned out – following the March 2020 panic that saw crypto prices temporarily crash, they rebounded spectacularly, with Bitcoin hitting $69,000 in November 2021.

Coming out of COVID-19, the world then experienced a second set of events that had the opposite effect – the rampant money printing by central banks, plus other geopolitical factors, have led to massive inflation and a squeeze on consumer spending. This has led to risk-on assets like cryptocurrencies being sold en masse, which coincided with the collapse of platforms like Celsius, BlockFi, and, of course, FTX.

This combination of factors has led to cryptocurrency prices being anywhere from 75% to 99% down on their peaks from 2021, showing that no cryptocurrency is safe when the headwinds are that strong against it. Crypto is therefore currently in a bear market, a bear market that won’t end until there is enough free money in the pockets of regular people to splash out on crypto.

History of cryptocurrency price shocks

There have been several examples throughout history when the price of a specific coin has been massively affected by external events. One example many rush to is when China declared in December 2013 that it was banning all financial institutions from handling Bitcoin. Bitcoin fell almost 50% in a matter of days as a result, and China’s actions effectively killed the 2013 rally. Similarly, when China declared a ban on Bitcoin mining in November 2017, the price of Bitcoin fell 21%.

Bitcoin isn’t the only coin that has been impacted by external events. Ethereum dropped 50% in one day in June 2016 when the DAO was hacked, XRP crashed 55% in the days after Ripple was charged by the Securities and Exchange Commission for selling unlicensed securities, and the FTT token crashed 90% on the day that FTX went bankrupt. 

However, crypto prices have also been impacted in a positive manner by events in the past. We’ve already mentioned Elon Musk’s support of Dogecoin causing it to smash through its glass ceiling in 2021, while in January 2020 Craig Wright’s BSV coin jumped 142% in a day after he supposedly received access to over a million BTC linked to Satoshi Nakamoto.

This turned out to be fake news, as did Litecoin’s supposed trial as a payment method inside Walmart stores, which Reuters reported in September 2021. Litecoin jumped 30% as a result, only for Reuters to quickly backtrack and say that the story was a ruse that it had fallen for. Another instance of market manipulation?

Can you trust experts?

The concept of the ‘crypto expert’ is a very thorny issue inside the crypto space. Many will try to predict prices both in the long and short term, using various metrics to explain their reasoning.

However, the fact of the matter is that hardly anyone predicted that, for example, Bitcoin would hit $1,000 by 2013 or $20,000 in 2017. And when the crypto market crashed in March 2020 as the COVID crisis hit, very few people were out there saying Bitcoin was on course for $70,000 within 18 months.

When it comes to predicting crypto prices, there are two lines of analysis that are typically used – fundamental and technical. Fundamental analysis looks at the underlying nature of a cryptocurrency, such as its use case, level of adoption, the team behind it, and all these things that can’t be measured but give an idea of which projects are the most promising.

Technical analysis uses specialist tools combined with data on price performance to predict where crypto prices might top or bottom out. These are useful for those who can use them to trade, but these are based only on historical performance and don’t factor in fundamental factors, such as what’s going on in the wider world or what a project has going on under the hood.

The most reliable ‘experts’ use a combination of both fundamental and technical analysis, but even the best have no idea what will happen next in the crypto world. For example, hardly anyone expected FTX to be so badly run, and its implosion took almost everyone by surprise.

It also pays to be wary about anyone who is too sure about the future price of a cryptocurrency – the chances are they are talking up the coin because they hold a bag and they want to increase its value.

How does the future look for crypto prices?

Right now, we have to say that the immediate future looks bleak. The bear market is just over a year old, which means there is probably another year or so to go before we can start talking about a potential reversal in prices.

However, if there is one thing that crypto has taught us, it’s that it always comes back. This is no guarantee of course, but as long as there are projects out there that continue to build and offer a solution to a problem (or a chance for speculation!) then the good times will roll again.

Frequently Asked Questions (FAQ)

We have no way of knowing what the value of the crypto market will be in 2030, but if the market continues to grow at the same pace then it would be worth some $100 trillion by 2030.

Crypto prices are low right now because cryptocurrency is in a bear market, following two years of extraordinary gains. Prices cannot go up forever, and a crash always follows a price explosion.

There is a very good chance the cryptocurrency prices will increase once the bear market is over. The crypto market operates in a cycle, and the bear market has to play out before the bull market can raise prices again.

In an ideal world, you should buy crypto when the bear market is at its very bottom. However, you won’t know it’s the bottom at the time! Therefore, the best time to buy crypto is in stages, either on the way down or on the way back up.

It’s impossible to know which cryptocurrencies will rise the most in future. The best thing to do is conduct your own research and make up your own mind about which coins are your favorites.
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