Cryptocurrency has proven its potential to us since it was introduced in the market. Imagine, it started from cents and now rose to an amount that we never expected. This proves that our world embraces the digital economy where trades and exchange occur in our digital era. But aren’t you curious about how is cryptocurrency value determined? This is what you will learn in this article if you will read it till the end.
Countries that Doesn’t Support Cryptocurrency
We know that that you are curious to know about how is cryptocurrency valued. But before we dive into that topic, allow us to share with you the countries that don’t support cryptocurrency. This is important to know, especially if you’re planning to put your cryptocurrency on the list of exchanges. Not just that, if coincidentally you have to cash out and the country where you at doesn’t support it, your money will be useless. Nobody dreams that to experience these scenarios. So we made a list below of the countries that don’t support it.
- Bolivia – this country doesn’t exactly reject the use of cryptocurrency. The central bank of Bolivia issued a resolution, clearly denying the use of bitcoin in any trade or transaction and the other cryptocurrencies. This statement is similar to the statement of the central bank of Brazil. And the reason why they do not support the use of cryptocurrency is that they do not want to deal with issues linked to the risk in operations. But would they change their mind? Only the government of Bolivia can answer that.
- Macedonia– this country may be rich in history, but the use of cryptocurrency is illegal here. Instead of decentralized transactions like cryptocurrencies, the banks are the ones that operate the international payments in Macedonia. Its citizens use denars when they buy, sell, receive, or send money.
- Ecuador– this country is loyal to its dollar. Any form of cryptocurrency or bitcoins is considered illegal by the national assembly of Ecuador. So what do they use? They use their local currency, the dollar, with their transactions. They have their very own electronic money system, but their government controls it. And they only use dollars for the transactions and trade. So clearly, it is considered centralized.
- Algeria – this country doesn’t support any use of cryptocurrency. The government even granted the financial law that states Algeria forbids it to use cryptocurrencies in any commercial transaction. So the citizens will use their local money in trading. And this means the bank is in charge of its international exchange.
- Bangladesh – be it bitcoin or other cryptocurrencies, these are all considered illegal in their law. This was based on the money laundering prevention act and foreign exchange regulation act of 1947.
- Nepal – this country is neighbors to the highest mountain on the planet. However, it bans the use of cryptocurrency and bitcoins. So you cannot trade using your cryptocurrency if you are in this country.
How is cryptocurrency value determined? It depends on the trade. It’s like the basic concept of economics. The higher the demand in trade, the higher the value of the cryptocurrency. So vice versa, if the demand in trade is low, the value of the cryptocurrency is also low. You can keep the value of the cryptocurrency high if people are hooked on it. The greater its popularity in the market, the higher the value of the cryptocurrency. Since it is not just used by one country, you can see it being used in multiple exchanges. Given the time of exchange and trade, the value of the cryptocurrency will rise.
The People Using It
The second reason how is cryptocurrency value determined is the people. Cryptocurrencies are everywhere, so you cannot just see them in one place. You can’t also predict its price because the government of banks does not control them. As you have observed from the reasons we have provided why other countries don’t support cryptocurrency, every country’s citizens play a big role in the value. So imagine if those countries take back their decision to ban the use of cryptocurrency. So the majority of the population will be using it. This will greatly affect the cryptocurrency value because we will face a shortage, so the value will rise.
The Active Wallets
Another reason how is cryptocurrency value determined is linked to the nodes. The Node count accurately tracks the number of active wallets on the network. The active wallets are the hot and cold wallets or digital wallets where you can store your cryptocurrency. So imagine if many people will choose to install their digital wallets. This will be the reason for mining. It is not literally mining because you don’t need to dig to get the gold or precious stones. Mining means new cryptocurrency will be made. Another device will be registered by the software that generates cryptocurrency.
The cryptocurrency rose to fame since the day that it was introduced. With its growing popularity, many countries are supporting it and used it in trading as well as in exchange. We bet you never saw this coming too. And now that we have shared with you how is cryptocurrency value determined, you can understand it more and use it more efficiently. With proper handling, you can use your cryptocurrency in chasing opportunities that will lead you to the road to riches. Find out more about cryptocurrency here!