Why and How To Track Crypto Value

Almost every decision-making process in the crypto world relies on forecasting a futuristic outcome. One of the skills required to make accurate predictions is knowing how to track crypto value. This article will consider the factors influencing crypto values and how you can track these values for improved decision-making.

What Is Crypto Value?

Crypto value refers to a cryptocurrency's perceived worth or market price at any given time. Unlike traditional fiat currencies, typically backed by governments and regulated by central banks, cryptocurrencies derive value from various factors within decentralized blockchain networks.

Although some cryptocurrencies have generated public trust due to government backing, like the USDT, they generally exist on decentralized technology, void of official sanctioning. The value of cryptocurrencies is determined by factors such as demand and supply and the cost of production, among others.

Why Is It Important To Track Crypto Value?

There are several reasons investors should make crypto value tracking a priority.

●     Investment Tracking

When someone invests in a project, it is expected that they will monitor their investments. By monitoring the value of crypto assets, they can make better decisions about purchases, sales, or whether they need to hold on to their assets.

●     Manage Risks Better

In a market with high volatility in price changes, investors want to make better decisions that reflect improved risk management practices. To do this, they need to track price movements and assess the impact of regulations to develop strategies that reduce the risk of losses.

●     Investment Opportunities

Crypto traders are always looking for opportunities to profit. If this is your goal, tracking trends and patterns in crypto values will help you identify what crypto assets to purchase or sell at a particular time.

How To Track Crypto Value

●     Exchanges

In addition to creating trading opportunities for crypto enthusiasts, exchanges provide real-time information on the price movements of cryptocurrencies. On most exchanges, it doesn’t require a fee to do this. Ensure you only register on the platform and gain access to the tracking tools.

●     Price and Portfolio Tracking Platforms

These websites or apps help investors monitor their portfolios' performance across various exchanges. Some of the most popular portfolio monitoring platforms, such as CoinMarketCap, can help you keep track of price movements by providing tools for market cap analysis, volume of trading activities, historical charts depicting price movements, and other analysis tools.

●     Trading Platforms

Multi-asset platforms such as MetaTrader 5 are widely used for their unique features to track the value of crypto. For instance, MetaTrader 5 has advanced charting tools that can be interpreted using technical indicators to assess price movement and potential trends. Another advantage is that the platform offers in-depth information, which gives investors insight into the liquidity status of cryptocurrencies.

●     News Sites

Many news blogs and platforms are dedicated to reporting trends and updates in the crypto world. CoinDesk is an example of such a platform. They share relevant information on market trends, analysis, policies, and price changes that can help investors monitor the movement of crypto value and make informed decisions.

What Influences Crypto Values?

Several factors influence the value of cryptocurrencies; let’s look at a selection:

●     Mining Costs

Mining is the production process that creates cryptocurrencies. Miners use special computers to verify which blocks come next on a blockchain. When a network of these miners works together to enable a cryptocurrency to operate as it should, the program rewards them with a token of cryptocurrency.

The costs come from the energy consumed during the verification process. The computation requires expensive, high-tech equipment and lots of electricity.

This cost even becomes higher if you are mining for in-demand currencies such as BTC and ETH. The more competition there is for a currency, the more difficult it is to mine, thanks to the proof-of-work system that regulates most in-demand currencies.

With this, it is only expected that the higher the mining cost, the higher the currency's value because the currency's price has to be higher than its cost of production for miners to continue with work.

●     Demand and Supply

This is one of the most critical factors. When the number of people who desire a cryptocurrency (demand) exceeds the amount of the cryptocurrency that is available (supply), the value of the cryptocurrency increases.

How these currencies are supplied differs among currencies. For example, the amount of bitcoin that can ever be mined is already fixed at 21 million, so it regulates the amount that can be supplied when a new block is added to the blockchain by leaving it a fixed amount.

Some cryptocurrencies try to control supply by using the burning system. With this system, a certain number of already created tokens are rendered inaccessible for circulation, thereby ensuring that available tokens never exceed demand. In some cases, the value of a cryptocurrency is influenced by a leadership board that decides to make more tokens available (reducing the price) or burn some (increasing the price).

●     Activities of Exchanges

Due to their popularity, some cryptocurrencies enjoy the favor of most exchanges. However, projects that are growing in popularity may only be listed on a few exchanges. When more exchanges list a project, the more awareness and access it offers potential investors, which can increase the number of people demanding it.

On the other hand, if exchanges attach exorbitant fees to projects during swaps, it can dispel potential investors, resulting in greater supply than demand.

Importance of Crypto Value Tracking

Now that we’ve established some reasons why investors should prioritize crypto value tracking, you, too, can use these tools to help manage risks, identify investment opportunities, and monitor the performance of investments across platforms. You can use many platforms, but whichever you choose, ensure that they meet your specific needs with careful research.

***

DISCLAIMER

The views, the opinions and the positions expressed in this article are those of the author alone and do not necessarily represent those of https://www.cryptowisser.com/ or any company or individual affiliated with https://www.cryptowisser.com/. We do not guarantee the accuracy, completeness or validity of any statements made within this article. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author. Any liability with regards to infringement of intellectual property rights also remains with them.