What Causes Stock Prices and Crypto to Rise and Fall?


Ben Robinson, Reporter

The stock market is constantly changing and has an incredibly volatile nature. People are always on edge about their stocks because they obviously don’t want to lose their invested money. The stock market changes depending on many different things, however, the most common and typical reason is caused by something called supply and demand. Basically, if more people buy certain stock and hold it, the price of that stock goes up. Inversely, if more people decided to sell that stock rather than buy it, supply is higher than demand, thus causing the price to fall.

Other factors of stock prices going up or down, depending on things like financial news, natural disasters, and price speculation. While there are other factors, these are the main reasons for stock price fluctuation.

When certain events occur, for example, about a month ago (around the middle of February), when there were rumors that Russia could possibly invade Ukraine… much of the stock market dropped. After Russia, invaded Ukraine prices fell still; only recently, a month later, starting to climb back up. This drop was partially caused by the Moscow stock exchange being suspended because of the war in Ukraine. The drop was also caused by everyone selling their shares out of fear they would lose it… causing even lower prices. While not all stock prices will drop because of world events, it is a great factor in falling prices.

While cryptocurrency is technically independent of the stock market, it is believed that the correlation between prices rising or falling has many of the same reasons. Especially the bigger coins such as Bitcoin or Ethereum. However, the biggest factor in prices rising or falling in either crypto or stocks is supply and demand.

If you are looking to purchase stocks or buy cryptocurrency, there are many good mobile apps that can walk you through and help teach you about investments. These include Betterment, Robinhood, and Coinbase.