The cryptomarket is characterized by high volatile nature of the cryptocurrencies. The swrils and sways of the virtual world might give you a ‘pinch-me’ feeling at one moment while it can also send chills down your spine at the other.
When it was first launched, it did not have any official price at all as it was being sold in dollars. When the first exchanges started to take place, gradually a price for it also got decided. It started at 6 cents and reached around $22 in 2011. The Bitcoin then took off and climbed rapidly over $140 in 2013, it was clear from the trend that the investors had started to take interest in it.
However, for understanding the mechanism of functioning of the cryptocurrencies, it is necessary to know how the price of cryptocurrencies works.
Numerous Factors regulate the ups and downs of the cryptomarkets
It is different from the fiat currencies as the price of the cryptocurrencies is not set by the central government thus most of the regions do not accept them as a legal tender. The prices of the Bitcoins, thus is not decided by a single factor but numerous factors. It is traded on several cryptocurrency exchanges, all of which have different average prices. Indexes gather the prices on several crypto exchange platforms and use the average of it to determine the price. But the index sites do not function as an exchange platform, if you wish to buy or sell a Bitcoin, you will have to choose one exchange platform which possesses its own average price. Liquidity is another factor which contributes to the ups and downs in the price of the cryptocurrencies. Apart from these, the government policies also contribute to the fluctuations of the cryptomarket.
Some sites also offer the complete information about the trading rates of the cryptocurrencies, thus one can check the price of the virtual currencies from there as well.