Virtual currency is a type of currency that does not have an issuer, which poses a great threat to the existing currency issuance mechanism. Therefore, the governments of many countries have adopted an unfriendly attitude towards this virtual currency, so The price of this virtual currency is often prone to sharp rises and falls, so what are the main factors that essentially affect the price of Ethereum?

1. Factors of investor confidence

At present, the price of virtual currency has risen sharply, mainly because a large number of investors have poured into the virtual currency trading market. When investors are optimistic about the future prospects of this virtual currency, a large amount of buying funds will push up the price trend of Ethereum, and when investors are optimistic about the prospects of virtual currency, the price of Ethereum will also increase. There was a sharp drop.

2. Government monetary policy factors

At present, the attitudes towards virtual currencies in various countries in the world are usually divided into two camps. There are countries that take a firm resistance to virtual currencies, and there are countries that adopt relatively ambiguous policies on virtual currencies. But all countries will not be too happy to see the virtual currency of Ethereum replacing the existing currency system. Therefore, when the monetary policy of the virtual currency is adjusted by the governments of various countries, the issuance price of Ethereum will also be greatly affected.

3. Other virtual currency factors

Ethereum, a virtual currency, is currently not a very popular currency in the market. Many users who are bullish on virtual currencies are more willing to speculate on Bitcoin, and the price of Bitcoin, which is the army of virtual currencies, tends to fluctuate. The prices of other virtual currencies have a demonstration effect. When Bitcoin rises or falls sharply, other virtual currencies usually follow suit.

For investors engaged in virtual currency transactions, it is very necessary to have a big heart. Otherwise, it is easy to have health problems due to over-excitement or over-pessimism under the fluctuating prices of virtual currencies that are prone to ups and downs. At present, the price of Ethereum is mainly affected by investor confidence. At the same time, the price fluctuations of other mainstream virtual currencies are also important factors that lead to large price fluctuations of Ethereum.