Here we inform you of the factors that affect Extrinsic Value including :

• Market Sentiment: Market sentiment is a key factor in determining extrinsic value. Positive or negative news about a crypto asset can influence investment decisions. For example, if a crypto project receives support from a well-known figure or large institution, this can increase demand and prices.
• Regulations and Policies: Government policies that support or restrict the use of cryptocurrencies are influential. Clear regulations can provide security for investors, while legal uncertainty can create risk and decrease value in the eyes of the market.
• Macroeconomic Conditions: In unstable economic conditions, many investors look for alternatives to protect their value. Cryptocurrencies, especially Bitcoin, are often considered a hedge against inflation. When inflation increases, demand for cryptocurrencies may surge, increasing their extrinsic value.
• Technological Innovation: Advancements in blockchain technology or the development of new features can increase the attractiveness of an asset. For example, increased transaction efficiency or the introduction of more sophisticated smart contracts can give investors more confidence to invest.