The crypto market is the global ecosystem where cryptocurrencies are traded. Unlike traditional stock markets, the crypto market operates 24/7 and can be accessible globally. The total value of all cryptocurrencies, known as the crypto market cap, is constantly changing. Investor sentiment, news, social media, and technological advancements can cause rapid price changes. Favorable regulatory developments can boost investor confidence and drive prices up, while security breaches or regulatory crackdowns can lead to price declines. The activity of large traders, often called whales, can also influence prices.
When trading cryptocurrencies, investors must make sure their chosen exchange supports the coins or tokens they want to invest in. Once a cryptocurrency is listed on an exchange, it can be purchased and sold at the current market price. The underlying blockchain records all transactions and makes them public. When buying, you can use an instant order or a limit order. An instant order tells the exchange to buy or sell a specific amount of crypto when the price is right. A limit order lets you set a maximum price that you’re willing to pay or accept for the coins you’re purchasing.
Cryptocurrency prices are determined by supply and demand – just like the price of a baseball card or stock. To assess demand, you can look at the coin’s circulating supply (the number of coins that are available for trading), its market capitalization, and its volume. You can also see if the coin is being used in real-world transactions, which can be an indicator of its adoption and liquidity.