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I know exchange rate depends on so many factors theoretically, but how can I determine my cryptocurrency exchange rate according to demand and supply by programmatically?

Is there any standard algorithm to increase and decrease the value of cryptocurrency(ex. in USD) based on demand and supply?

How Bitcoin exchange rate increase and decrease automatically, Please let me know, is there any algorithm which can estimate the value of Bitcoin in USD and increase/decrease it's value(in USD) automatically.

marked as duplicate by Pieter Wuille, alcio, pebwindkraft, Andrew Chow Jan 10 '18 at 21:40

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  • 1
    What exactly do you want? Are you asking about price predictions? If yes, then no one can do that. – fluter Jan 9 '18 at 8:48
  • I want to know is there any standard algorithm by which value of any cryptocurrency increases or decrease. – Prabhat Sutar Jan 9 '18 at 9:27
  • no, there isn't an algorythm. Exchange rates are based on market factors like supply and demand, and these are not constant factors, I'd define them as being highly irrational and complex (as we humans are). So the difference between predicting the market future and throwing shells can be seen every day in FIAT world. A highly complex topic, with always unclear outcome. – pebwindkraft Jan 9 '18 at 20:06

Price of bitcoin is determined by the traders Suppose there are 2 Traders Person X and Person Y Then consider the following use case.

1.If person X has N amount of bitcoins and then he can choose to sell them at P amount of price.

2.Person Y wants to purchase the Bitcoin then he can choose to bye N amount of bitcoins for price P1.

3.If P=P1 then N amount of bitcoins are transferred to account of Y.

4.In the same way if the Buyers are decreasing the price and continuously finding the sellers for descried price then the price goes on decrising

  1. Vise-versa if the sellers are incising the sell price and continuously finding the buyers for increased price then the price of bitcoin goes up.

  2. The third condition which rarely occurs is If sellers trade and buyer trade is not matching then the price of bitcoin is determined to the midpoint of lowest sell order and highest buy order.

ie. If highest bye order is for 10L/BTC and lowest sell order is for 15L/BTC then the price will be set to 12.5L/BTC and users will trade according to that.

  • Thank you for your valuable answer, is there any specific algorithm to increase and decrease the value of cryptocurrency(in USD) based on demand and supply. – Prabhat Sutar Jan 9 '18 at 9:32
  • I haven't find any such algo yet,But you can place bye and sell orders 20% lower or higher than current price OR you can write your own scripts/algo if the Exchange where you are trading expose the API for such purposes – SwapnilKumbhar Jan 9 '18 at 11:59

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