What factors does token price depend on?

[MrSpasybo 1049]

Assets with more circulating supply often trade at cheaper prices in terms of dollar value per coin or token. BTC currently holds a comparatively low circulating supply of about 18.6 million, and even though this number increases slowly based on mining, its maximum supply is still relatively small at 21 million coins. Meanwhile, Dogecoin has a circulating supply of about 128.3 billion, based on CoinMarketCap numbers.
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Generally, assets with low circulating supply can rise higher in price per coin than assets with large supply counts. Yearn.finance’s YFI, for example, holds a very small circulating supply of just 36,635. YFI went from approximately $900 in July 2020 to $40,000 in September 2020. A multitude of other components factor into price rises, but typically, if an asset has a comparatively larger circulating supply, its price per coin cannot be directly compared to the price of coins with a smaller supply.

Article: Why some cryptocurrencies are worth $40,000, while others stay at $0.40

I think this is just a non-objective article because the author only considers the effect of the total supply on the token price. I still keep my view on total supply:

We all acknowledge that the price of a token depends on the law of supply/demand in market, and scarcity can reduce selling pressure, while at the same time token price increases.

As such, the total supply affects the token price, precisely the volatility of the token price.
If the total supply is too low like YFI (37K), we see that the price of YFI can easily be pushed up to $45K and then to $8.5K in a short time.
If the total supply is too high like DOGE (128B), if there is no strong support from the community, the DOGE 1 cent increase is also difficult because it means that $1.28B is needed to enter the DOGE market.
Therefore, many projects have used token burning to reduce the total supply to half of the original total supply like BNB or reduce until the community agrees. This has a short-term impact, but in the long run, there won't be enough tokens for the community to use.

Consider Ethereum's case, we now admit that the total supply of Ethereum is infinite, however this does not hinder the development of ETH price, it even makes ETH closer to fiat. As long as ETH's inflation rate is lower than fiat's, ETH price will continue to rise, in addition staking & EIP-1559 will increase scarcity and ensure ETH price is stabler.

Besides the total supply, which I consider to be the store of coin/token ecosystem value, I think there are other factors determine the coin/token price:
+ The real value of the coin/token: for example, using BTC makes it easier for us to transfer money across borders, saving us a few tens to thousands of dollars per transfer. Or 1 token can help users make profits from the liquidity pool, reduce transaction costs... It can be seen that when the crypto economy is quite small, this real value only accounts for a small part of token price;
+ Expected value, majority of token price: we expect that the value of the token will increase in the future as it is widely adopted and gaining interest from many people. Since the value lies in the expectation its volatility is very high, BTC increased from $10K to $48K in a very short time;
+ Minimum cost of mining: miners are the ones who maintain the network to make a profit, they will not continue the work if the profit is not enough to maintain the minimum mining cost;
+ Mental value: for NFT tokens or more simply CryptoKitties with collectible value.

In your opinion, are there any other factors that make up or affect the price of coins/tokens?

[MrSpasybo 1049]

4 hours ago, Kenny Campbell said:

I would also add, that on token price depends also its supply. Cause I can make the highest priced token in the world by making any ERC-20 token on my own and then make a liquidity pair in Uniswap, write there that 0.000000000000001 MTK (My Token) will be priced as 0.01 ETH and Uniswap cant do anything with it and it will price this token this way. 

 

But still it is great post. 

I agree with you, that you can do that. However, it is just a token created by you and not really LIVE in the crypto community, its value is temporary, it does not have its own tokenomics.
We need to look at the overview to appreciate the value & trend of a token. And as I mentioned, total supply is one of the many factors that affect token price.

[Asim808 223]

I think Tokens Price depends Upon BTC Rate More The Rate Of BTC Low The Price Of Talktokens. So If We want To Make Talktokens Price High We have to Invest In It Like As People Invest In Cureencies..

[yonkii 3205]

What requires regulation is Twitter. It is not different from scammer pump and dump groups what some people with followers can do and how they can raise the price of anything that is completely useless, and later will act against it and make price dive, while having the sheep that bought left in a huge loss. This is remarkable how Twitter works, when shutting down accounts for no reason, or for posting an opinion. This goes beyond prices and trading, it is a fascist dystopia that is there to promote the interests of one person, Jack. I had my Twitter account recently deleted, just because I mentioned in a Tweet that Jack has personal interest in supporting Bitcoin because of Square and the billions in fees he has made from it. Doge is just nonsense, a meme coin and it is valued now at what? 20 billion dollars? It became the biggest joke in value and as a meme it doesn't even worth this much. It is old and was abandoned and one accidental billionaire pumped this 25 times in price and is making me think that he is not worth the money he has made. 

[betelihem 4766]

21 hours ago, Asim808 said:

I think Tokens Price depends Upon BTC Rate More The Rate Of BTC Low The Price Of Talktokens. So If We want To Make Talktokens Price High We have to Invest In It Like As People Invest In Cureencies..

I get what your idea was, and tokens price don't depends on bitcoins price, they depends on the investors demand and need when a lots of investors who are holding tokens sell the token the price dropped and when they buy the token it rice.

[MrSpasybo 1049]

5 hours ago, yonkii said:

What requires regulation is Twitter. It is not different from scammer pump and dump groups what some people with followers can do and how they can raise the price of anything that is completely useless, and later will act against it and make price dive, while having the sheep that bought left in a huge loss. This is remarkable how Twitter works, when shutting down accounts for no reason, or for posting an opinion. This goes beyond prices and trading, it is a fascist dystopia that is there to promote the interests of one person, Jack. I had my Twitter account recently deleted, just because I mentioned in a Tweet that Jack has personal interest in supporting Bitcoin because of Square and the billions in fees he has made from it. Doge is just nonsense, a meme coin and it is valued now at what? 20 billion dollars? It became the biggest joke in value and as a meme it doesn't even worth this much. It is old and was abandoned and one accidental billionaire pumped this 25 times in price and is making me think that he is not worth the money he has made. 

Indeed, Twitter is slowly becoming a media force in crypto sector, and the tweets of famous crypto bulls/bears often become the subject of controversy and direct impact on token prices. DOGE is a prime example when Elon Musk became the spiritual leader for the DOGE community thanks to statements that have caused DOGE prices to increase insanely over the past time.

[Jack764 1841]

These factors have an effect on currencies, but also the amount of people who entered and owned this currency also plays a big role, as its price rises whenever it is owned by many people.

[MrSpasybo 1049]

2 hours ago, Jack764 said:

These factors have an effect on currencies, but also the amount of people who entered and owned this currency also plays a big role, as its price rises whenever it is owned by many people.

I agree with this, when everyone wanted to own Bitcoin, the price of Bitcoin went up. When BTC gets too expensive, people turn to investing in Altcoins and the Altcoins season comes. Under MicroStrategy's guidance, many major companies are learning and investing in crypto, which has led to a crypto market cap rising above $1.5T.
Given the current growth rate, I believe that the crypto community will soon grow as strong as the traditional market.

[David84 1191]

The price depend on the demand and offer, the more a crypto coin is available and not wanted the low price it will have , and vice versa, the more a crypto coin is wanted the higher price it will have.

[kryptonick 2659]

Who knows what the future will bring. Prices can easily plummet any time. The game is about make profit from your investment, I see some people have no plan and don't even know why they bought. Price can keep rising but also can start dropping. Some of the reasons the price of Bitcoin went this high, had to do with changes in the macroeconomic trend and the coronavirus effect in the economies. First everything crashed, and then the central banks printed so much money like never before, risking collapse of the fiat currencies. This was the main reason that Bitcoin was seen as a good investment, with ease of access and lately better regulations that allowed institutions to enter. But everything can change in a day as cryptocurrencies do not go well with governments.

[Ridam 7455]

Well there are different factors in which the price of the coin depend upon. In general the price given by the public as the price is completely decentralised and is determined by the public and the users of the exchange. For most of the coin, the market can plays the huge role in compare with the Total supply of the token or the coin. If the market cap is anticipated to be the higher and the Total supply of the assest is pretty lower then we can say that the price will hike if the public sees the market to higher and the liquidity keeps coming into the assest. 

Popularity, Total supply, Marketcap, are the key points in determining the price of the coin. And the liquidity which comes after that also has key role in determination.

[MrSpasybo 1049]

On 3/10/2021 at 3:17 AM, Normally said:

From my own understanding the token price depend on two factors. The first factor is to add the cryptocurrency to many exchange wallets, and the second factor is the demand and supply of such cryptocurrency, because the price cryptocurrency is determined by the market force.

@NormallyAs you said, when the token is accepted in a crypto wallet or especially listed on the floor with full features (margin, future...), that token will have higher liquidity and access to more users, token price will also be guaranteed. Large transaction volume will help protect the token price from manipulation.

[Maria karam 667]

Of course, my friend, but the price of the currency does not depend only on the amount of supply, but is related to the demand for the currency as well. The more demand for something, it will definitely lead to a rise in its price, and this is what causes the difference between the prices of cryptocurrencies.

[MrSpasybo 1049]

On 3/19/2021 at 10:04 PM, Maria karam said:

Of course, my friend, but the price of the currency does not depend only on the amount of supply, but is related to the demand for the currency as well. The more demand for something, it will definitely lead to a rise in its price, and this is what causes the difference between the prices of cryptocurrencies.

@Maria karamYeah, so the nature of the value and the price volatility of tokens comes from the demand of the market. Can we rest assured that the demand for ETH has always been greater than this coin's inflation rate?

[Whited35 15285]

All mentioned reasons in OP by the author have the sense to make the impacts on the prices of cryptocurrencies in the markets. More precisely, backed technology and the cryptocommunity are the key factors to affect the prices of Tokens. Generally, if markets' demands are not significantly growing, generally price of tokens get decreased and the vice-versa. 

[joemcgwa 3227]

On 2/14/2021 at 12:16 AM, MrSpasybo said:

Consider Ethereum's case, we now admit that the total supply of Ethereum is infinite, however this does not hinder the development of ETH price, it even makes ETH closer to fiat. As long as ETH's inflation rate is lower than fiat's, ETH price will continue to rise, in addition staking & EIP-1559 will increase scarcity and ensure ETH price is stabler.

Are you saying that they are planning to make ether a stable coin and not as an asset of investment or did I get you wrong.