Dynamic model of currency exchange based on investor behavior

In the modern financial environment, cryptocurrencies have gained significant popularity, becoming an important element of the global economy and financial markets. The dynamic development of blockchain technologies and decentralized financial instruments fosters increased interest from both private investors and institutional players. However, the high volatility of cryptocurrencies and the complexity of the mechanisms behind their price formation necessitate a detailed study of these processes. This paper models cryptocurrency exchange operations, analyzing price formation influenced by buying, selling, and introducing new crypto coins to the market. The system simulates investor behavior with individual parameters: initial balances, risk profiles, and profit-driven trading strategies over a specified period. The model takes into account the psychological aspects of investor behavior, their reaction to changing market conditions, and the impact of external factors such as news and regulatory changes. Special attention is paid to analyzing the impact of adding additional quantities of coins to the exchange at a reduced price during peak cryptocurrency price values. This creates conditions for activating trading operations, increasing liquidity, and affecting overall market dynamics, particularly volatility and price fluctuation trends. The study shows how such interventions can be used to stabilize the market or stimulate its further growth. The analysis of the obtained data allows for detailed observation of changes in the cryptocurrency’s value over time, identifying patterns and trends. Using statistical and analytical methods, the impact of different investor strategies on their financial results and the overall market situation was investigated. This enables assessing how investor decisions-timing, trade volume, and market reactions-impact profits and market dynamics. The research emphasizes the importance of a deep understanding of market mechanisms and trading psychology and can serve as a basis for developing effective trading strategies on cryptocurrency exchanges. The obtained results may be useful for traders, financial analysts, and developers of algorithmic trading systems, contributing to increased efficiency and stability of cryptocurrency markets. Moreover, the findings of the work can be applied to improve regulatory approaches and policies regarding cryptocurrencies.