Over the past few weeks, the cryptocurrency market has seen overall exchange price declines, which highlights the need to provide consumers with real added value to help stabilize the exchange price. The price declines have led to a lot of speculation as to the cause along with when it might possibly end.
The mainstream media has gone back to calling it the end for cryptocurrencies. However, the silver lining of the price declines do call attention to the difference between real and speculative value.
Speculation provides an integral role in valuing new technology since it estimates the discounted future value of the product or service. However, speculation becomes bad when there is not enough real value that underlies the product or service to meet said speculation.
Many of the top cryptocurrencies have some form or fixed supply and thus can only increase in price when demand increases, based on basic laws of supply and demand. Thus, to have real increases in exchange prices rather than only speculative price increases, cryptocurrencies have to increase their user base and adoption.
Thus, cryptocurrencies have to deal with constant exchange price fluctuations as speculators are constantly trying to reevaluate its discounted future value based on its present and perceived future use and adoption. An example of this can been seen with the recent concern over Litecoin dipping below its USD exchange price from five years ago. Read more from dashforcenews.com…
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