Introduction to Cryptocurrency Exchange:
A Cryptocurrency exchange, or simply a virtual currency exchange, is an online business which enables users to trade digital currencies or crypto coins for other digital currencies, including traditional fiat currency. In this kind of business, virtual money is transacted in the same way as traditional currency traded on major exchanges. This type of virtual business is usually open to all types of traders, from individual investors to companies with an established trading account. Most commonly used virtual currencies exchanged on the Cryptocurrency exchange are those derived from Litecoin, another digital currency launched by an entrepreneur, Charlie Lee.
Concept of Cryptocurrency Market:
The concept of the Cryptocurrency market was conceptualized by Ulrich Spiesser, former executive director of the Swiss-based Association for Currency and Financial Instruments, who believed that the way monetary flows were calculated. His ideas were later taken up and refined geeks who worked on the open source software created by ledger computing pioneers Henry Cloud and Georgeoles. Through a process of algorithmic mathematics called the distributed ledger approach, the distributed database guarantees that the trades are registered and that no one has access to information which could influence the trades. Although it is relatively new technology, the Cryptocurrency market has already proven to be one of the most lucrative markets in recent years, with new applications being developed every day.
Main Objective of Cryptocurrency Market:
The main objective of this article is to give an overview of the current Cryptocurrency Market and its present market size estimation. This will allow you to determine whether Cryptocurrencies could be a great investment for both the long-term and the short-term periods. There are two ways to conduct a Cryptocurrency market analysis, the two being the technical analysis method and the market sizing method.
Determining the Market Size for Cryptocurrencies:
With the help of Cryptocurrency market software, you can determine the market size, or the number of active users, for each different Cryptocurrencies. The market sizing method is quite similar to other market research tools used by professional investors. It gives you a snapshot of the current value of each Cryptocurrency against the US Dollar. You will need to download the Cryptocurrency market report from the website of your selected exchanges. Most of the popular exchanges will provide free reports, while others may charge a small fee.
Choosing the Best Cryptocurrency:
After downloading and installing the software, it is important that you select the appropriate Cryptocurrency for your needs. If you intend to trade in several different Cryptocurrencies, then it is best if you choose the largest marketplace. The largest market, or biggest wallet, will always have the most tokens in circulation. Most traders usually go for the market with the most accessible wallets, which will consequently mean the larger number of possible transactions. However, some traders feel more comfortable with smaller and less popular Cryptocurrencies.
Cryptocurrency Market Cap:
Once you have chosen your Cryptocurrency, it is advisable to learn about its market cap. A Cryptocurrency's market cap is the total amount of tokens that are worth in US Dollars. You will be able to find the market cap on the dashboard of your chosen Cryptocurrency. The higher the market cap of your chosen Cryptocurrency, the higher its value.
Factors Affecting Cryptocurrency:
There are several factors that affect the valuation of your chosen Cryptocurrency. They include supply and demand, which is caused by the governments or central banks of various countries. Supply is usually related to the number of individuals that actually want to exchange their coins for another. On the other hand, demand is caused by the number of individuals who are currently interested in trading.
Types of Cryptocurrencies:
There are also two types of Cryptocurrencies. One is known as Fiat Cryptocurrency and the other one is called Utility Cryptocurrency. Fiat Cryptocurrency include the most popular ones such as the US Dollar, the Euro, the Japanese Yen and the Australian Dollar. Utility Cryptocurrencies include the most popular currencies available, including the Canadian Dollar, the Swiss Franc, the British Pound and the Euro. In addition to these popular currencies, other lesser known currencies may also be traded on Cryptocurrency exchanges.