How Is The Price Of Bitcoin Being Determined?
Taking a glance and understanding better how the fluctuation of Bitcoin cryptocurrency is occurring and how it affects the value of the price will supply you with a better knowledge of how your funds are being invested in the cryptic space.
The value of BTC (Bitcoin) is one of the hottest topics today that keeps us with many questions. A lot of people all over the globe are constantly checking and being updated on the price of Bitcoin and it’s movements. The one’s that are invested in cryptocurrency and has a self interest are watching even closer and more often, even if they are not necessarily invested directly in BTC.
Bitcoin, otherwise known as BTC, was the first cryptocurrency to exist. It’s creator, whose real identity is still not known, although there are many speculations, using a pseudo name Satoshi Nakamoto, issued and released Bitcoin to the community in the year 2009. Bitcoin was the 1st using the blockchain as a public ledger in a decentralized way. A real digital currency that does not rely on a central institution or a bank. The creation of Bitcoin was supposed to be a step ahead in the big plan for global decentralization. Contact us today to get a FREE account.
There are few factors that determine the price of Bitcoin:
- News\Fear\Uneducated Investors
Join our Crypto Trading Platform Today – Get a FREE Account
The main cause of the price change in Bitcoin is being determined by the people in the market, do they want BTC? if yes, that means they are willing to pay for it. In times where the market shows signs of wanting to buy BTC the people who holds it knows that people want to pay for it therefor they can ask for a higher price, which can cause a chain reaction of confusion in the market or in easier term “FOMO” (Fear Of Missing Out).
The supply of BTC is limited to a maximum of 21,000,000 (21 million) coins, there will NEVER be more. Therefor as the supply finds it’s way to investors hands the supply of available BTC is shrinking, what can cause a market demand and maybe also a chain reaction that will make more people want to enter the market before it’s “too late”.
News are proven to “shake” the price of Bitcoin, when good and positive news are released people get a positive vibe from the market and are getting “good signs” of entering the market. In that same way, when bad news are released people are more cautious which makes the price and the demand of Bitcoin to drop, that can also create a chain reaction of fear in the market based on price change and not real knowledge of the technology, this situation is called “FUD” (Fear, Uncertainty and Doubt).
In the crypto market there are exchanges, that rely on traders and volume, in the last year or so it has become a center stage for bots to rule upon. Bots are meant to work 24 hours a day 7 days a week, that’s because the crypto market is always ON, that gives some “edge” to bots vs traders. Bots can create many bids and asks in the market really quick and make other traders get confused and buy at a higher price than planned. It is important to remember few things:
- Bots trading is illegal in the stock market and will be soon in crypto.
- Bots effect the price in the short term and shouldn’t bother long term investors.
- Bots are easy to learn and trade against if you have the knowledge.
After learning of those elements it is vital that you understand that some of them cannot exist in a bigger market cap, once BTC is widely accepted it’s price will be more stable, similarly to today’s stock market, although the supply has to stay the same, the demand may grow, which will lead to a substantial price growth. When the price is more stable, that’s when leveraging your investment can be a very smart move. In today’s market leveraging your investment is a risky move but can lead to major gains.