What key features of a cryptocurrency induce scarcity and hence affect the price of the cryptocurrency?

People want cryptocurrencies because of what they can do with them. A simple example is the ability to transfer value across borders without the need for intermediaries. If someone wants to do this, they will need to buy coins, thereby introducing demand for that coin. The things you can do with a cryptocurrency are the utility of the cryptocurrency. Whenever someone wants to use a coin, they’re creating demand, which in turn induces scarcity for that coin. As we said in the answer to the previous question, scarcity is what informs the price of a cryptocurrency.

We can see how utility creates demand by going through an example. Bitcoin is used as the underlying currency for most of the cryptocurrency world. If you want to buy another cryptocurrency, it’s usually easiest to buy BTC first and then trade the BTC for the other cryptocurrency on an exchange. Let’s say I want a particular altcoin (a contraction of alternative coin; any cryptocurrency which isn’t Bitcoin) and I only have fiat. It is rare to have some way of buying an altcoin directly from fiat. Even if there is, I would most likely have to pay a significant premium on the market price of the coin. The easiest option would be for me to buy BTC, send the BTC to an exchange and buy the altcoin using the altcoin/BTC trading pair on the exchange. I am creating demand for BTC when I buy BTC using fiat. Bitcoin is used to buy other cryptocurrencies because it is the most common reference currency for the whole cryptocurrency market. This utility for Bitcoin creates demand for the currency from me, even if I never want BTC itself and only want altcoins. This is just about the simplest utility for a cryptocurrency. There are many more, much more involved, much more interesting utilities for cryptocurrencies and more are being developed all the time.