Traditional investors have plenty of information that can help them predict the movement of stocks and bonds. They know what affects the value of companies and loans, and they can try to figure out which events are likely to lead to price rises and falls.
Cryptocurrency investors have it harder. Bitcoin and altcoins haven't been around long enough to create clear movement patterns but we can see that a number of major events are likely to lead to price rises. Here are five of them.
1. Government Regulation
Governments still don't know what to do about cryptocurrencies. They're not sure how to regulate them or even how to define them. But they'll figure it out, and when they do, investors might face more obstacles and paperwork, but trust in cryptocurrencies will rise. That will bring new demand and lift prices. Expect a gradual rise as rumors of a regulation spread and a bigger one when the regulation is unveiled.
2. The Entry Of Big Funds
Among those new investors will be the big investment funds: pension funds, hedge funds, and so on. Some companies are already putting together crypto investment funds but once the giant investment shops feel confident enough add altcoins to their portfolios, prices will jump. Keep an eye on the finance news for announcements from big investors.
3. A Weakening US Economy
Cryptocurrencies are currently acting as a store of value, in the same way that gold holds value. Gold rises when stocks and bonds fall as investors look for safer places to put their funds. The same is likely to happen for cryptocurrencies. If a trade war weakens the economy or investors lose confidence in US bonds, they'll look for other places to put their money, including in altcoins. If you think stocks will fall, buy crypto.
4. China Opens The Web
Cryptocurrency was supposed to be a free environment but with most Bitcoin mining and much development now taking place in China, the crypto environment is heavily influenced by one of the world's most controlled Internets. For Chinese Internet users, access to the rest of the world's Web is heavily restricted. A Chinese government decision to lower the Great Firewall would have a huge effect on traffic flows, increasing demand and possibly even creating movement on the block size limits that have restricted the growth of Bitcoin. It's unlikely but the release of the Chinese Internet would push up crypto prices.
5. Increased Stability
Ironically, one of the events that could push up the prices of cryptocurrencies would be fewer rises in the prices of cryptocurrencies. If the market were to become less volatile, whether as a result of regulation or the increase in volume generated by large investors, other investors would feel more comfortable putting their money in too. Prices won't rise as dramatically, but the increase in demand would put up prices gradually. It won't be quite as exciting but the profits will be easier.