Hi all friends. In the next video, we will talk about oil, gold, and other factors that affect the value of cryptocurrencies. Moreover, all these factors affect not only Bitcoin, Ethereum, Litecoin, Binance Coin, but also other digital money. Go!
Impact of oil on cryptocurrency
For several years now, there has been a pattern – when the price of oil falls, then the value of Bitcoin and other digital money also falls. When the price of oil rises, then BTC and altcoins become more expensive. But if earlier such an impact was insignificant, then the most striking example occurred on March 12, 2020, when oil prices collapsed along with the price of cryptocurrencies.
For example, Bitcoin fell from $ 8000 to $ 3800 – more than 2 times per day! Other digital money also fell by 50, 100, and even more percent. At the same time, the first assumptions about the impact of oil on the price of tokens appeared back in 2014. First, oil affects the stock market, then forex, and then only crypto.
As it turned out from history, oil has only a short-term effect on coins. After a few days or at most weeks, the value of digital money returns to its original position. Therefore, if you use fundamental and news analysis when trading cryptocurrency, it is worth looking at the oil chart against the dollar and tracking its changes.
Impact of gold on cryptocurrency
Like oil, gold has a huge impact on bitcoin and other tokens. Many consider cryptocurrency to be a defensive asset, like gold, in which you need to invest during a crisis and wait. For this reason, the rise and fall in gold prices are sometimes reflected in the value of BTC and altcoins.
However, it is worth remembering that the crypto is still a more risky asset, as it is subject to high volatility and its rate is unstable. However, if the price of digital money falls quickly, it usually recovers quickly as well. Whereas gold is slowly falling and slowly rising. But blockchain technology has facilitated the emergence of new assets.
This made it possible to mark the gold. Traders now have the ability to trade cryptocurrencies pegged to gold. As there is a USDT token analogous to the US dollar, so there are, for example, PAX Gold (PAXG) and OneGram coins, analogs of gold. And such marketization of gold has helped the development of the cryptocurrency market. There are more and more new tokens backed by gold.
Other reasons affecting the cryptocurrency
We have already figured out the connection between gold, oil, and cryptocurrency. What other reasons are affecting the value of digital money? In general, any reason can cause panic on the exchange or active buying actions. Whether it is the closure of any crypto project, the arrest of the owner of Bitmex, the prohibition or support of the use of Bitcoin in a particular country, the hacking of Kucoin by hackers, and more.
Small technical problems with the exchange or rumors can also affect the value of coins. When someone sells tokens quickly, there is a general panic in the market. When coins grow in value, it means that the market is in a favorable situation, and blockchain technology is developing. The S&P 500 index also affects bitcoin and altcoins, but this influence is unstable to rely on.
Be that as it may, at the current time, the cost of cryptocurrencies is influenced more by the consequences of the coronavirus. So at one time, the CME exchange in America, due to the coronavirus threat, stopped trading in digital money and futures on them. Various crypto events and announcements of new products were canceled or postponed indefinitely.
The video about oil, gold, and other factors that affect the value of cryptocurrencies is coming to an end. I told you what to consider when the price of oil or gold starts to rise or fall, and how this affects the price of Bitcoin or altcoins. That’s all until the next videos on botcryptotrade.com