Some factors influencing the price in the cryptocurrency market are similar to those in the traditional market, though there is still a lot of difference. First of all, in the crypto world, the major factor of the exchange rate is hype that shows interests of masses. Moreover, fluctuations in the cryptocurrency market are much stronger than in the traditional stock market. The number of the price driving factors is quite big, here's the main of them:
• Supply and demand. Most cryptocurrencies have limited supply. This deflation model increases their value comparing to fiat money the issue of which is not limited and is regulated by the governments. In some cases, part of the coins is burned, and that can drive the cost up.
• The utility of the currency. That is one of the critical factors that influence the demand and, therefore, the price of the coins. The more cryptocurrencies are easy to use, store, and exchange, the bigger the demand. Many new opportunities for buying, selling, and storing digital coins have appeared in 2017.
• Speculation. Actions of big investors and heavy speculators often determine the price move.
• Mass Media. Economic news can have a dramatic effect on public perceptions of cryptocurrencies and, thus, on exchange rates. This effect can be either positive or negative.
• Project news. Announcements of important upcoming events such as platform launch, strategic partnership, new fork, etc. can change the coin price drastically.
• Confidence in traditional systems. If the level of confidence in traditional financial systems increases, people are more inclined to store their assets in fiat currencies and vice versa.
• Legal/Governmental issues. These are mostly the news of crypto market regulation in different countries, exchanges events, etc. which drive the prices up and down.