Why is Ethereum Rising in Price?
On January 1st, Ether was at around $8. On 13th of June, it hit $400.
This is a gargantuan rise – but what caused it?
Here’s some simple reasons:
- Increase in demand – more people are buying it on exchanges
- Increased public attention – As more mainstream news pick up on Ether, it gains legitimacy
- New exchanges – As new exchanges add it, more users can access it and thus demand increases in newer markets
- Fear over Bitcoin – Some wobbles have been as Bitcoin is seen as less “safe” and investors diversify into Ether – though can be often followed by a correction
- Number of transactions – spikes in transactions on the network show that it’s gaining credibility and embedding itself to stay, thus be more valuable.
- ICO Launches – High profile ICOs may raise millions of dollars and cause a spike in people’s trust
- High profile use cases – Similar to ICOs, but less speculative, any news about established technology being connected to the network will boost trust / value. E.g. support from Microsoft / JP Morgan
Why is Ethereum Falling in Price?
The fall in crypto-currencies can be as harsh as the climbs in value.
For such a new and exciting technology, investors need to be tough through both of these periods. It’s highly lucrative but also highly speculative, and you should never risk more than you can afford to lose.
Here are some reasons why Ether may be falling in price:
- Low buy volumes – the less people are buying, the less demand there is to fuel price rises.
- Too much demand – strained and overloadedDuring some ICOs, there is a rush to buy and the network becomes , reducing confidence in the network which can cause price to fall.
- Panic Selling – If exchanges go down, it can cause a flurry of panic selling as people try to get money out.
- Corrections – Prices rise so quickly that a correction will bring it back down – normal market behaviour.