Which Factors Affect Bitcoin Price Fluctuation? Read These Points
Bitcoin is one of the most widely accepted and used cryptocurrencies. Despite its volatile nature, many prefer to invest in it. Since Bitcoin is a decentralized form of currency, it is not regulatedby any group, organization, or government. The value of a Bitcoin depends upon numerous factors.
In recent times, the Bitcoin values have been exploding. Especially after 2020, Bitcoin values experienced a noticeable rise. Though the year witnessed US-China tensions and a global pandemic, the year seemed to be a boom for Bitcoins and other cryptocurrencies. Bitcoins rose to more than US $30,000 by the end of 2020.
Factors That Affect Bitcoin Price Fluctuation
● Market Demand And Supply-
As more and more people start accepting the concept of Bitcoins, the demand increases and thus its value. If demand outweighs supply, Bitcoin’s price will rise. Taking about the market rise in 2020, during the pandemic in March, the popularity of Bitcoins rose more than ever. Most surprisingly, even the central banks appreciate the concept.
Canada, Russia, and China are already developing central bank digital currencies. All these lead to an increase in demand, and the prices explode. As a result, the incentive to mine Bitcoin is likewise half every four years. Consequently, the quantity of Bitcoins in circulation is decreasing.
● Worldwide Acceptance-
People have started trusting the safety and longevity of Bitcoins. It is considered a worthy asset by the masses. People invest in it despite its high volatility. Moreover, the need to go cashless and stand against the market trends has made it easier to accept Bitcoins.
Recently, some major public companies converted their cash values into cryptocurrencies. An American company named Square exchanged Bitcoins for $50 million. Following the trend, Microstrategy also converted its $425 million cash to Bitcoin reserves.
Thus, the confidence of the masses in the survival of Bitcoins has added to the inflation in its value.
● Ease of Access-
As more and more organizations have started accepting Bitcoins as a mode of payment, the concept of Bitcoins has become easily accessible to the masses. For instance, in October 2020, PayPal (a company that ensures digital payment globally) announced the launch of features to support the exchange of cryptocurrencies, including Bitcoins.
The company provides the platform to more than 350 million users. Thus, it automatically makes Bitcoins accessible to so many of them and other 30 million merchants that would be accepting the payments.
Other than PayPal, platforms like Venmo also support such features. And there are other companies too that are specifically working to make cryptocurrency payments.
Also, platforms like at this link makes buying and trading Bitcoins accessible to people. You must try this amazing bitcoin platform, and you will love it while using this outstanding application.
Another major step to make people aware of Bitcoins was taken by Visa. Visa in integration with a leading cryptocurrency exchange platform, Coinbase; announced Bitcoin supportive credit and debit cards.
● Market Competitors-
Although Bitcoin is known to be one of the most popular and widely accepted cryptocurrencies, many others are on the market. And the competition amongst them dramatically influences the price of Bitcoins.
Some of the major competitors of Bitcoins as per the data of 2021 are Tether, Binance Coin, Ethereum, Cardano, and Polkadot. As the competition in the market keeps increasing, so does the value of Bitcoins.
● Social Media Influence-
Media draws the attention of the masses through their knowledge. As per studies, the media is known to have the most significant influence on the explosion or fall in prices of Bitcoins. People tend to agree with them, and thus this way, the media has the potential to bring new users of Bitcoins.
The power of social media isn’t hidden. The knowledge here spreads like wildfire. And it provides room for new Bitcoin users to increase their understanding and trust for the same. Positive presentation in the media leads to growth in the value of Bitcoins, whereas a negative depiction will show adverse results.
So, these were certain important factors that influence the market price fluctuation of Bitcoin. If you, too, are into Bitcoin trading, you must analyze these mentioned above points carefully before starting Bitcoin trading.