What are the driving factors for crytpocurrency valuation?
Scarcity? Utility? Use? Demand? Network? or am I off base already?
I think you are not off base,but you are on track. Basically, Scarcity refers to the finite nature of the coins. In economics, a fixed supply of a certain item would increase its value in the long term, assuming its demand increases. This creates scarcity, as there is only a limited supply of coins in circulation. For instance, Bitcoin’s maximum supply is fixed at 21 million coins. Especially for coins that have a great utility, demand will undeniably push its value up.
Some coins even employ a “burning” mechanism, which refers to the act of destroying a portion of the coin supply. This would increase the value of the coin as there is now a much lesser supply of coins.
Utility, A coin must have a strong function (or use-case) to incentivize people to hold the coins; a coin’s utility is strongly correlated with its value. ETH for example,In order for anyone to execute commands and develop applications in the Ethereum Blockchain one needs to have ETH, as it will be converted into gas and represents the ‘fuel’ for the Ethereum ecosystem. Therefore, ETH is used as a currency within its system to fuel transactions and development. The more people that execute transactions and develop apps, the greater the demand for ETH and will, therefore, push prices up.
I think that other factors like advertisement, politics, influence by notable people in the society etc ,may also help to push the prices of some coin up.