Bitcoin Forum

Hello,

I have a question, which I couldn't understand. What determines the price of an ALTCOIN?

for example:

ranked 4: Cardano price is 0.95 USD .... market cap: $30,158,999,828

while

ranked 5: Polkadot price is 25.14 USD .... market cap:  $24,025,000,997

on the other hand,

ranked 21: Avalanche price is 46 USD .... market cap: $3,610,321,000


What did I miss here ? why for example cardano is cheaper while avalanche or balancer coin has lower market cap but they are expensive than cardano and Polkadot ?

thank you in advance.

Simply demand and supply. The coin with higher price probably has high demand. Staking kind of contribute alot to the demand. If there is more demand for a coin than there is available to sell, the coin rises in price. If there are more supply to sell than demand, it falls.

The market cap is price multiply by circulating supply.
While the price was determined by trader who buy or sell the coin. Its bassicly a demand and supply war which will determine the price.

True, its economic basic rule.
But sometimes the price was pumped by a group of trader which make the demand so high at the time, but its will decrease soon as it just a instant demand and will not long-lasting.

Not far from the truth, well, after this rule the one thing that potentially determine the price of every-Altcoin around the cryptocurrency is the product. An altcoin project with a workable product will definitely make wave for itself, these sects are self promotional and doesn't need any pump group in the ecosystem. Any workable product(project) will always attract the rule of demands IMO.

Actually, in crypto, not with the supply, but the demand plays a big role. If there's a hype or a big shill for example, expect that even a sh*tcoin, deadcoin, low/high marketcap etc. can increase their respective market price.

Take a time reading here, it will surely feed your mind:
https://coinmarketcap.com/faq/

the value of an altcoin is not given by its volumes on an exchange but by the demand and the offer in general and the interest of investors in it,sometimes its value is artificially manipulated by the so-called whales

I do not know what is so difficult in it as it very easy to understand that answer to your query is circulating supply, so the higher the supply the price will be less but market cap could be higher similarly for a small supply coin price would be high and market cap could be lower. So supply is very important factor that can define price and total market cap.

The major determinant of altcoin price is Demand and supply this is influenced the market acceptability of the coin, this is base on what the coin is really offering to the public, which can be regarded as intrinsic value.

Tokenomics of a coin determine the price of the coin which os often directly proportional with the market cap and inversely proportional with the supply of the coin. So in my eyes the price of the coin is not that much important but yes psychologically it does have an impact on ones investment.

the attempt at price pumping is only to increase the power of demand, it will not determine whether the quantity demanded will increase or not.
Also, the total capitalization also matters. The amount of supply and demand has no effect on small capitalization because it is easily manipulated by a group or even a person.

You can compare the supply between all of them. The total supply was also giving a very big impact to the how much price for coin.

Ada is having 30 billion supply, while DOT 1 billion and avax 75 million tokens.
The total supply will be making how much total inflation in the market. The valuation will be calculated based on how much demand for these supply. The demand from the market and supply that already issued by the team will determine the price of token or coin.

Compute the supply of them all. Just like in BTC, the total market cap divided by circulating supply.

thank you all for demonstrating this matter!

Now I get it, supply is more important than market cap


you can find supply of every coin here :

https://coinmarketcap.com/all/views/all/

which can affect the price of a coin is dependent on the supply and demand in the market. the more demand for coins in the market, the higher the price and vice versa. besides the number of coins supply, usually coins that have a limited supply have a high selling value.

Actually it should be a combination of both. As you see a project like YFI has started it to have a lesser supply but its market cap is good. I think they're the one who started to have lesser supply to have a better chance of growing. But that doesn't mean that it's the only reason why they became popular. It's still relying to the true potential of the altcoin that you want to invest.

A lot of things play the role mate, well , actually , not really a lot of things, but for example, total and circulating supply plays a role, and also the market capitalization plays a role to how the altcoin is ranked.
for example, a coin or token with a lot of circulating supply which have a high demand in the market is likely to worth less in dollar than a coin or token with a few circulating supply and also has a high demand in the market, but in this scenerio, the coin or token with the higher circulating supply is likely to rank higher while that with low circulating supply will be worth more in price due to scarcity but will rank lower due to low coin in circulating with results to low market capitalization.

because cardano has more coins in circulations rather than avalanche or balancer mate,,
thats why we must know about the circulating supply and total supply from any coins, to predict the future price from the coins

of ourse the power of buyers and sellers my friend, and high market cap will not make the price high if the project has a lot of supply
and low marketcap will has a good price if the supply was low

The amount of hype and non-sense involved in sustaining unsustainble projects or so-called altcoins is what drives their prices. There's no supply and demand here, come on. Most of these projects are based on promises: the next gen oracle, the next gen currency, the nex gen virtual machine etc.
Most people invest in this crap because bitcoin price is too high... I have seen too many failed altcoins and I am completely disillusioned.

I think coins or cryptocurrencies prices are determined on their trading volume most likely. Look at ETH (https://trade.kucoin.com/ETH-BTC), even with high gas fees, users are still holding and trading it. There are lot of DeFi's involved in here also. There are so many factors as to how these prices are determined.

The volume already determined from the supply and demand, I can say that if the volume reflects the demand for hte coin. When users are trading on the centralized exchange site and the traders will not be charged the high fees like when you are trading on the UNIswap. That was the different thing dude.

True Demand and Supply plus staking which create some form of artificial shortage in circulation detarmine the prices of all cryptocurrencies however but why do investors tend to demand some particular Alts than others? why don't we just decide that we want to pick a low cap Alt and invest in it generally, increasing the demand for it thereby increasing the price of that Alt? In most cases to me, I believe investors are already tuned to some particular projects to invest in and this had nothing to do with the volume in circulation like ETH, what is its total supply? So to me, I believe it is more of interest in the project rather than its supply cos we also saw a bit of that with the DOGEcoin interest with investors after the MUSK tweet.     

Very true, the price of cryptocurrency is definitely determined with the rising demand and the supply available. Well this is very basic principle of economics. In case there is a high token supply for a certain coin but the demand is low from the users and traders of the crypto, then we expect that the cryptocurrency's value will drop. Big demand will certainly increase the price of the crypto. It only means that the prices of the coins are mainly influenced by human emotion and the hype it generates.

Could make more sense if you add their max supply beside them, a low max supply coins that is really good can have better value than a coin with huge max supply, although it's not always like this everytime, the project needs to be well adopted for better price surge

The answer to the question "what determines the price of altcoins" is exactly the same as the answer to the question "what determines the price of [anything that can be bought/sold]".
Supply and demand are literally the first words on the page of an economics textbook for the youngest. If [something] is not needed by anyone , it has no price. If necessary, the price is there. If the demand is higher than the supply, the price increases. If the demand decreases, the price also falls.
Welcome to the market.

Moat of it is uses case and sometimes people will compare to another successfull crypto project, for example : many people compare Cardano to ethereum and ethereum 2.0 is syill no where to go while cardano already there to fix the fees problem, i my self wont use ethereum becaise of its fees, imagine you want to send $100 worth of token with $50 fees. It is paintfull.

In this case as you were said before supply and quantity of circulating tokens influence.
Moreover there are many other factors like locked tokens, staked tokens or burnings which can occur sometimes in some projects.
Actually many altcoins have too big price and they objectively can`t cost so much.

Be careful, when you buy any asset. Try to analyze token economy and real prospects

It's a centralized exchange site. Fees will not be applied when your coins already stored on the hot wallet of centralized exchange site. You will be getting small fees on your trading activities. It has nothing to do with the high fees outside of cex.



Do you have clue about what you are talking about right now? The involvement of defi to replace the centralized exchange site.

It is on the demand of a coins and also the real use case of a project bring impact to the price of altcoin. If there is a huge demands definitely it will rise and added to that the hype. Just like the huge supply of a certain coin with hype lurking in the social media page attracts to the users to invest.

You didn't check or put other things in consideration.
You forgot the coins in circulation, the locksed tokens and maximum supply as well. You should also put in mind that maximum supply of these projects may change depending on how the ecosystem changes with time.
Some projects total supply is also fixed, while some are subjected to change in the future. The price also determine the total market cap as well as fully diluted market. Please check coin gecko, there are more you should learn from the platform.

I think the important moment lies in-market support and the developer's ability to create increased market demand. when this happens in a moment I think the pump will happen in a force we don't think about. as happened to Dogecoin.

demand and supply is always the case. the circulating supply doesn't even matter. take a look at dogecoin. when there is a buy order of $0.07 for doge and someone just sold it for the price of $0.07, that is exactly the price of the coin as well. you can't exactly say its market is manipulated since both bid and ask orders are a lot, it could be true. but truly the market dictates the price.

I think the ranking and market cap of a coin do not determine the price, because what determine the price is circulating supply, for example:
1. Cardano
Circulating Supply
31,112,484,646 ADA
2. Polkadot
Circulating Supply
907,726,137 DOT
3. Avalanche
Circulating Supply
76,937,055 AVAX
from the data above, you can see that the price of a coin that has a little of circulating supply is definitely higher than coin that has a lot of circulating supply, so in my opinion, what determine the price of a coin is circulating supply and not the ranking or market cap.

what about the whale on it? do we ignore it? it looks like whales also have a big role to play in playing altcoin prices. whale will influence small traders to follow the game he made

To add to this also , the supply of the coin too will be a factor to consider. I notice this that a coin that has low supply and good use case usually make high demands. This is not always the case though because some coins are in billion yet growing fast, this depends on the team.

All those things come down to one thing really ; how much people think it worths. Because if people believe it to be higher than the current price they will buy until it reaches that price and if people think that price should go down then they will sell and they will make the price go down. At the end of the day price will always be whatever people think it should be and not a cent more or less.

I believe supply/demand is really the key here, supply is not even "that" important and demand decides everything, even on something like ethereum which has really unlimited type of situation right now, it went up because demand was insane, even on dogecoin which has insane supply, it still went up thanks to demand. All in all I believe as long as there is demand for a coin, the price will go up one way or another and it will be amazing.

The law of supply and demand will determine the price of altcoins, even though those altcoins are deliberately pumped out by many people but it will certainly return to the price it should have.

Agree, but you need to make difference between product and vision, because most of project offers a high tech product as a vision which hard to reach to lure investor for them.

throughout the years here, lurking around the forum, checking projects one after another. you will encounter a lot of projects with noble concepts but very rare that you will see a truly successful venture. yes, a lot of them are surviving owed to price manipulation but later on, you will see that they will start to die down once the community realised that they have no product to offer.
you will see the true value of the altcoin if it is existing in the market for years. and you are seeing the services or products they are offering to the market.
and just like what redsun114 mentioned above, demand plays great role in the price journey of the coin. if people believe on the project, they will buy it and hold for long term.

Altcoins price movements are based on supply and demand, so coins with a high enough demand will definitely continue to rise in price. Especially if
the amount of supply is limited, then if the demand is high, the price will automatically soar. Then the market cap has no effect on the coin price,
because if the coin price is cheap but has high demand with a limited supply, surely the market cap is much higher. Things like this include the basics of
the economy, therefore in choosing coins for investment correct analysis is necessary. So as not to set the wrong purchase price.