So you can sell your coins on the open market the coin must be ‘listed’ on one or more exchanges (you cannot ‘buy back’ your coins from the company other than under special circumstances such as ‘bonus buy-backs)
Listing a coin drives liquidity – or the ability to turn coins into ‘real money’ often referred to as ‘fiat’
Liquidity is created by people trading the coins – buying when they think the price is low, selling when they think it’s high – we aren’t in the ‘trading game’ – we just want our coins to increase in value – but this is driven by others trading
Listing a new coin is a bit like the process for listing a new company on the Stock Exchange
List the coin on a lower level exchange so it becomes publicly available and begins to ‘get noticed’
List the coin on higher level exchanges once the momentum starts to build
Other exchanges will then pick up and list the coin independently.
But how does a coin get listed in the first place?
The company listing the coin has to prove their own credibility
They have to prove the coin has a clear use case and potential value
They have to pay the exchange to list the coin (this is often a six figure sum)
They have to negotiate and sign off on several agreements including non-disclosure
This takes time but when all is agreed the Exchange, not the Company, will decide when the listing is to take place and announce it to their existing trader community. They will also in agreement with the Coin Company agree the price at which the coin will be listed on their exchange
Four things then influence the market value of the coins
Its perceived value and usability (what is the coin ‘for’ what value does it provide?)
The number of coins available together with the price
The ‘demand’ for the coin in the market – more people want to buy than sell
The ‘scale’ of its liquidity – fast or slow moving, high or low volume of trades etc.
These are the market forces which affect the value of the coin on a day to day basis
When you sell your coins you get paid in fiat at the market price on the exchange and just like stocks and shares you can choose when and at what price you wish to sell them.
If the coins you own have are ‘valuable’ – have a good use case and growth potential then in general, and despite fluctuations in the market, you’ll hold on to them until they reach a price you can no longer resist.
The mistake people make on all types of exchange, stocks and shares, forex and crypto is to panic sell when they see a reduction in price – this drives the price down and is where people complain of losses. The smart thing to do when this happens is to buy because the market always, without fail, rises again.