The crypto market is a space where people buy and sell digital currencies. Coins purchased are stored in a digital wallet, and records of transactions are added to the blockchain. Investors can trade crypto on various exchange platforms, including centralized and decentralized exchanges. Traders should select an exchange that provides robust trading tools and a wide selection of coins to trade. The exchange should also offer a variety of fiat gateways, so users can deposit and withdraw cash.
Cryptocurrency prices are determined by supply and demand. Supply refers to the total number of coins available, while demand is a measure of how much people want to own it. Other factors that influence prices include regulatory news, macro trends and technological advancements.
For example, favorable regulations can increase investor confidence and drive up prices, while security breaches or regulatory crackdowns can cause them to fall. Technological advances that improve blockchain technology scalability or security can also raise or lower prices.
Many investors are drawn to crypto because they see the potential for it to transform the future of finance. Others believe the appeal lies in its portability and decentralization, or because they view it as an investment that may grow in value. However, it is important to note that, because cryptocurrencies are not regulated in the UK, you cannot be compensated for any losses suffered as a result of investing in them. This is particularly true if you invest through an unregulated broker or exchange, where your funds are not segregated from those of other investors.