These days, we try to know more and more about bitcoin or cryptocurrency investments. However, have we ever wondered what the reason behind this interest is? Well, the answer is easy – the constant and speedy increase in the value of Bitcoin System. Our next question is – what makes the price go higher at such a rapid pace? This answer is also easy but comes in multiple points. The reason is not one but many for such aggressive bitcoin price growth.
People who want to be a part of this crypto journey can study more about the prices, graphs, predictions, price-defining factors, and basics of bitcoin and then invest their money. For those looking for a safe platform to do that, the bitcoin code could be their one-stop solution.
What impacts the value of bitcoin?
Bitcoin is a completely decentralized program that has no backup from the government. However, government plays a great role in a currency’s circulation. Therefore, there are sure multiple other factors that are highly impacting the price of bitcoin to go up and down. Here, those price-moving factors have been discussed below.
- Demand and its supply
When the supply of an asset becomes limited, its price increases if there is high demand. Bitcoin left only about 2 million to be mined. The number was 21 million at the time of its creation. As bitcoin has a good amount of craze and demand in the market, that limited supply of bitcoin is thought to increase its value in the future.
- Exchange availabilities
Bitcoin’s value often depends on its availability in the crypto exchanges. Bitcoin has great liquidity in the crypto market compared to other cryptocurrencies, and it can be traded through various exchanges. But, as the number of bitcoin users is increasing daily, and you never see it is a constant number, the availability of bitcoin in the market continues to increase and decrease. As a result, its price ups and downs.
- Regulations
Bitcoin doesn’t have any centralized or government regulations. So its price is not determined by the government. No bank also regulates its transactions. So, it can be said that bitcoin is used freely by its users, and there are no rules on it. This factor impacts a lot of bitcoin’s price movement.
- Media
From the very beginning of its journey, media has played a big role in bitcoin being popular in the world. Since 2009, there is hardly any day that the media hasn’t forecasted a single topic on bitcoin. Bitcoin enthusiasts are constantly making posts and comments on social media; we have the example of Elon Musk and how his announcement moved many people toward bitcoin investments. The movement increased bitcoin’s price and decreased when the opposite statement was forecasted.
- Production cost
Bitcoin is produced by mining that needs huge power and the time of every bitcoin mining is not the exact same. So, the production cost differs, impacting bitcoin’s price just like other factors.
- How many competitors do they have?
Today, there are so many cryptocurrencies. In the last few years, some other cryptos like Ethereum, Litecoin, and polka dot are performing well, which has had a negative impact on bitcoin’s price. So, bitcoin’s competitor is also a factor in its price movement.
Before you invest, let me know about some of the common factors of bitcoin.
What is its current price?
The current value of bitcoin is something around 20,000 United States dollars. The price is quite on the lower side, but experts say it will rise in 2022 and reach new summits.
Is bitcoin illegal?
Some countries havelabeled it legal, but not all of the world. China has banned it, so it would be illegal to use or do any mining activities in China. The ban continues in Bangladesh, Algeria, Iraq, Morocco, Tunisia, Nepal, Qatar, Egypt, etc. There is also a country such as El Salvador, which took it as one of the legal tenders.
To be precise, bitcoin itself is not illegal, but many people doing some illegal activities have made it infamous to some extent. However, people need to remember that, all the illegal activities have been conducted by the fiat currencies all these years. So, it is up to the user in which way he or she is going to utilize it.
