[How exchanges work] part one
Sorry for the delay ,things came up that needed my attention,
Today we’re going to talk about how the price is generate in the exchanges.
A liquid market is a market with many bids and offers.It’s has advantages like you can easily acces your funds and withdrawal your funds ,because the value is known,but on the downside volatility accompanies you ,Crypto-currency market is quite liquid,this makes the price of the crypto fluctuate a lot.
Why does the price go up and down,
I would say people expectations, if people expect a price increase of coin x due more increase in utility over time((more merchants accept it, transaction volume grows, there is a larger ecosystem of developers building on top of it) The demand of the coin will rise and assuming that the supply doesn’t increase in the same proportion the price will go up. On the contrary, if the utility decreases (mobile platforms block crypto apps, technical issues arise, governments ban them, exchange markets get shut down) the demand will decrease, the supply will increase (more people willing to sell) and the price will go down.
In its simplest form it’s all about supply and demand , certain factors will influence those two to increase or decrease. After the start price of the coin ,
The price will be determined by the market. For example your seller , you bid you coin at the market the chance is your bid will be filled or it’s too high and you need to sell lower because there is no demand at those prices.So the exchange tries to match the buyers and sellers that have the same prices a bid.
And here is a talk you could show to your family/friends etc.
That are little are hesistant ,afraid and distrusting to enter the cryptoworld
and last but not least ,
look at those prices, do you remember when sbd was 13$ or steem was 8$+ ,perfect oppernutity to powerup
Until next time peace out,
Durzo