What is cryptocurrency

Cryptocurrency is an asset that exists in digital form only. There is no physical equivalent. Ownership and every transfer are recorded on a public ledger called a blockchain. The term "crypto" comes from cryptography: only the holder of the corresponding private key can move funds from a given address.

How it differs from a bank account

A bank account balance is a record inside the bank's own systems. The bank manages that record, can freeze an account or reverse a transfer, and processes payments only during business hours through clearinghouses.

A blockchain's ledger is maintained collectively by thousands of computers around the world. No single institution can alter the record. A transfer can be initiated at any time and typically confirms within minutes to tens of minutes. The trade-off is that a confirmed transfer cannot be reversed. If an address is entered incorrectly, funds are extremely difficult to recover.

Common types

• Bitcoin (BTC): The first cryptocurrency, launched in 2009. Supply is capped at 21 million coins. It has the largest market cap.
• Ethereum (ETH): In addition to transfers, Ethereum runs programs called smart contracts. A large number of applications and tokens are built on it.
• Stablecoins (such as USDC): Price is pegged to the US dollar, so 1 coin stays close to $1. Commonly used for pricing and settlement.
• Other tokens: BNB, SOL, and others, each serving their own blockchains and ecosystems.

Why prices move so sharply

Cryptocurrency has no government or institution backing its value. Price is determined in real time by global supply and demand. Markets run around the clock, participants are worldwide, and news and sentiment travel fast. This makes price swings far larger than in stocks or foreign exchange. A 5% daily move is not unusual. In extreme cases, major coins have fallen close to 50% in a single day.