The cost of bitcoin is difficult to predict - sharp ups alternate with equally sharp falls. But why does the price of cryptocurrency fluctuate so much? And who is responsible for these races? All users of cryptocurrency, the project team or Satoshi Nakamoto himself? Let's see. Here are the 10 factors that somehow influence the BTC course.
- The nature of bitcoin is easy to understand when compared to gold. Everyone knows what gold is, right? Now let's try to describe its properties. There is little gold in nature, it is difficult to mine, its value is constantly growing, the same amount of gold costs approximately the same anywhere in the world, a large piece of gold can be broken into smaller ones. Of course, gold and bitcoin are not the same thing, but even today this cryptocurrency is difficult to mine, demand for it exceeds supply, and therefore it is expensive - and the future is quite favorable for it.
- With Bitcoin, banks and all their services are not needed - only after the invention of cryptocurrency did people realize that credit institutions constantly deceiving the consumer are not the limit of financial efficiency. Bitcoin has become an excellent alternative because fewer players are involved with it in a financial transaction. Add to this the high-speed Lightning system, which allows you to transfer funds from America to India in a matter of minutes. Thus, the effectiveness of Bitcoin - a key factor in predicting future prices.
- The price of bitcoin is also determined by many psychological factors. Investors are influenced by the mood of other investors, and simply by those around, because if everyone bought Bitcoins around, and you haven't, it cannot but affect your position, and this social pressure is one of the most noticeable factors moving Bitcoin forward.
- Also, when forecasting the cost of Bitcoin, it is necessary to take into account the degree of penetration of cryptocurrency in the retail trade, because its prevalence directly depends on the number of places where it can be spent. The same with the traditional currency - if no one accepts it, it is impossible to use it. So we follow the words “accept bitcoin” in online stores.
- No government can control Bitcoin, and the point is not that someone does not allow them - it’s just that way. The Bitcoin network is so large that even by combining all the supercomputers in the world, it will not be possible to control even half of the system, so the state does not affect the price of Bitcoin.
- As the popularity of blockchain technologies grows, in general, Bitcoin also increases in price, since these are related things.
- Even the attitude to cryptocurrencies on the part of various social networks influences the price of bitcoin. Imagine that your friend spread the news about the price reduction in WhatsApp and Facebook - of course, this will affect the opinion of his familiar cryptocurrency users. Thus, besides the regulation from above, there is also self-regulation.
- The fact that Bitcoin can be traded online and without intermediaries is very important, because you can, without getting up from the couch, just sell or buy cryptocurrency in just a few movements, without filling out tedious forms - convenience in these matters is very important.
- Bitcoin is valuable because it is used by many people. Imagine why you need Facebook if you have no friends? Similarly with Bitcoin - the driving force behind the development of the system is the social connections and the involvement of millions of people.
- Further development of cryptocurrency will inevitably affect its prevalence, and then the cost. Among the most important new products that strongly affect the usability of the system, it is worth mentioning Bitcoin-ATMs and exchange-traded funds (ETF), which allow you to trade cryptocurrency using standard exchange-based tools.