The Effect Of Supply And Demand In Crypto.

avatar of @akinolawilly
2 min read

Effect on something does not primarily mean that it is bad, effect on things can be bad or good. This is something I just wanted to express and explain for people who do not understand. So here when I say the effect of supply and demand in crypto does not necessarily mean that I'm about to talk about bad things that supply and demand is causing in crypto. With that established! Let's dive right into the details on this post.


Supply and demand is the bed rock behind the the volatility of crypto, the fall and rise, the downturn or upturn. In simple terms, the buying and the selling of crypto is what causes whether the price goes up or comes down. Primarily of people sell, the price comes down because many are selling so the value reduces as many can buy it cheaper from other sources, the price also increases when people buy, which means they are hodling. Now it is scarce and people will find it hard to buy it, which increase the value.

The value of crypto highly depends on its user, people keying into the technology and accepting it as a mode of payment is what gives them the value. Flash back to when Bitcoin was just starting up, we all know how low the price was and even someone sold tens of thousand of crypto for just a pizza. We all know how much pizza only one bitcoin would get now. A lot! Right? Yea!. As more people get to accept it as a mode of payment, it gives it more and more value until now.

In more simpler terms, the prices of crypto goes up when demand for it surpasses the amount available and also vice versa for the supply as well. As we all are happy that the price of hive is getting higher it means the demand for hive surpasses the amount available and so on. So I guess you all get how things work now.

The term supply and demand is a catalyst that affects the volatility of crypto and what we all want everytime is to the prices to go higher but it is also important to balance all this things as standing or staying in one position might crash the system. The beauty of volatility in crypto is how it can be so beneficial to all. If you are short term investor, the system welcomes you and also if you are a long term investor, you are welcome also. And if it just to save money as well, the sky is big enough to allow birds to fly.

What do you think is the effect of supply and demand on crypto? Share your thoughts and I will be happy to reply them all. Thanks for viewing my post and have a wonderful day.

Cheers! ๐Ÿป