Only experienced analysts and advanced traders can accurately predict the growth of cryptocurrency costs. For a novice and even an average investor, a change in market quotes almost always comes as a surprise. Fortunately, there is one simple way to predict the price rise of cryptocurrency – to wait till it will be added to new exchanges. Why is the growth of cryptocurrency after adding to the stock exchange? How to make money on it? We will describe in this article!
Why is the growth of cryptocurrency after adding to the stock exchange?
The price of cryptocurrency increase after adding it to the exchange, in most cases. This pattern was discovered long ago by cryptocurrency experts (some call it the effect of exchanges) and is actively used by experienced traders. But why is this happening?
Unlike ordinary money that has physical value (for example, is tied to the gold and currency reserves), the only value of cryptocurrency is its prevalence. The higher it is, the higher market value of the coins. The more people are willing to buy them, the faster their price increases.
Developers can offer a unique technology that solves the main problems of the blockchain, but if their coins are not in demand, the price of them will not grow. Typical example is Bytecoin cryptocurrency, almost no one knew about it for three years.
How to create demand of cryptocurrency? That’s right – to bring it to the masses, to actively promote the market. Where are the market processes going? Where to buy and sell coins? The only place is cryptocurrency exchanges.
Adding cryptocurrency to the stock exchange increases its demand that leads to an increase in cryptocurrency value. The more exchanges are trading cryptocurrency, the higher its market performance. For example, Bitcoin (# 1 in the CoinMarketCap ranking) is traded on more than a hundred exchanges, and WAX (# 80 on the same list) is only nine.
Of course, not only the number of exchanges is important, but also their quality. More precisely is the reputation in the cryptocurrency community. Support for large trading platforms is the key to success for almost any cryptocurrency. Adding to the listing of large stock exchanges increases the liquidity of the coin and stimulates trade.
If the cryptocurrency failed to break through to the well-known sites, it quickly disappears from the market or maintains neutral (sometimes even negative) price dynamics.
How is the growth of cryptocurrency after adding to the stock exchange?
The news about the upcoming addition of cryptocurrency to the top exchange noticeably stirs up investor interest. A large number of people will learn about cryptocurrency just during the PR campaign of the company (and no listing can do without it). Adding the token to the listing becomes a direct signal for the purchase of assets.
Experts note that during the rise of cryptocurrency, after adding to the stock exchange, a curious psychological effect can be traced. Investors know that the rate will grow, so they begin to buy up cryptocurrency intensively and by this increase its value.
As a rule, the listing news appears online a few weeks before the event. So the developers gradually heat up the interest, causing the asset price to rise and creating a favorable environment for the price surge.
Within a few days, the public does not have time to warm up properly, and for mass distribution of news (without which a sharp jump will be impossible) time is needed. But it is impossible to stretch the expectation – in this case, until a new token is added to the new exchange, a significant portion of potential buyers will drop out.
If all preparatory steps are followed (mass advertising in popular sites, the optimal time for warming up, and so on), adding cryptocurrency to the stock exchange instantly increases its market performance. These are the indicators, because not only the price increases, but also the cryptocurrency capitalization.
Most recently, everyone could observe how such a scheme worked against Bytecoin cryptocurrency. During three years, the coin could not break through the ceiling of $ 0.00005. And in the summer of 2017, after appearing at Poloniex and HitBTC, it grew to one cent. In May, she appeared at Binance, after which, within 24 hours, her rate increased by 400%.
Another example is the Zilliqa cryptocurrency. In the spring of this year, it made a price spurt from 3 to 16 cents due to it appearance on Bithumb, OKEx and Upbit. Lisk cryptocurrency is the same example. Its value increased by 60% after bitFlyer was added to the exchange.
Even the more well-known cryptocurrencies noticeably increased in price precisely after entering the top trading floors. In the spring of last year, ZCash cryptocurrency was still worth $ 80, and in the summer, after appearing on major exchanges, it was already $ 400.
Even a sharp jump in the price of Litecoin cryptocurrency was associated with the addition of coins to new exchanges. After the Bithumb listing appeared, the value of the coin increased by 15%, and the debut at Coinone brought lightcoin into the top four most popular cryptocurrencies worldwide (after BTC, ETH and BCH).
After a sharp jump in the exchange rate, there is always a correction – this is the law of any foreign exchange market. And the stronger the price of cryptocurrency has risen after appearing on the stock exchange, the more it will fall during the correction.
When a reliable cryptocurrency and exchange are chosen, there remains one more important point – to sell the asset in time at high price.
Experienced traders are able to track trends and predict price rollback, so they can choose the optimal time to sell cryptocurrency. It is better for ordinary investors to sell assets as quickly as possible before the correction phase comes.
And, of course, you should not rush to buy coins that first appeared on the stock exchanges after the ICO. During this period, their price is extremely unstable, and it is very difficult not to miscalculate with the moment of buying and selling assets. It is better to wait for the stabilization of the course, after which, as a rule, the phase of active growth begins.