Factors Influencing Bitcoin Price
Cryptocurrency, especially Bitcoin has revolutionized the digital world. This unit of exchange is free from the control and fetters of a monetary authority. Plus, its users don’t even need the assistance of a third party, such as a bank, in order to store their money.
Owing to the increasing demand, the Bitcoin value is augmenting day by day (as of December 19, the BTC/USD rate is $19,850). Every year we see Bitcoin breaking a new record in the world of cryptocurrency. This makes it even more significant in the digital money arena.
In this article, you’ll get to know how important Bitcoin has become now and what the reasons are behind its immensely growing value. Moreover, you may also get to know that Bitcoin will only grow more in the near future.
Factors Influencing Bitcoin Price
Unlike the fiat currency, Bitcoin has a transparent protocol. No matter how many Bitcoins are supplied to the market, people will always know about the total supply number of Bitcoins, which is 21 million. The supply is controlled by the process called Bitcoin halving, which was already done in the previous years, including 2016.
So, when this is done, Bitcoin increases in value as seen previously. When it comes to Bitcoin mining, it is produced at a fixed rate with 1 block that is generated in every 10 minutes on an average. In this case, one block comprises some amount of Bitcoins. When Bitcoin halving takes place, this amount is divided, which reduces the supply of Bitcoins. And, if the supply of Bitcoins diminishes, there will be a rise in its price, unless or until its demand decreases.
As we all know, Bitcoin is growing exponentially owing to its augmenting demand across the world. People buy Bitcoins in order to make more fiat currency when they sell their owned Bitcoins. Investors can cash out their Bitcoins anytime into USD, EUR, and even GBP.
Everyone around the world is crazy about Bitcoins as compared to any other cryptocurrency. This can also be proven when we look at the high transaction charges on Bitcoin, which shows that people are so much eager to pay just to use this network and the cryptocurrency fuelling it.
Besides, with an ever-increasing price of Bitcoin, the investors tend to consider it a high-yielding long-term asset and the experts call it “an incredible store of value”. This leads to more people getting into Bitcoin.
Trading Bitcoins for fiat currency is not so difficult, which is one of the reasons behind its rising price. Although Bitcoin’s wide acceptance as a payment platform might be slowly gearing up, the trading of this cryptocurrency has been soaring like a rocket in the past years. A lot of exchanges allow you to turn your euros and dollars into BTC in few clicks and with no special effort or skills. This has certainly propelled the growth of the Bitcoin market.
The amazing Blockchain
Blockchain is a spectacular technology. Many countries have already started exploring it along with Bitcoins. Additionally, more than 50 chief banks over the world have already set up their work on the R3 consortium so that they learned more about the Blockchain technology, including its functioning.
The banking sector is trying the new technology powering Bitcoin, and such initiatives provide an advantage to the first cryptocurrency. The reason behind this is that the increasing curiosity of banks regarding Bitcoins is rapidly legitimizing the discovery of Satoshi Nakamoto in the public perception, even though most of the financial firms do not want to officially associate themselves with Bitcoin.
Bitcoin has seen a massive increase in its performance as well as its price in the recent years. In fact, it has been the best performing currency in opposition to the US dollar around the world. This means the infrastructure of Bitcoin is only set to grow with the huge venture financial backing injections.
By infrastructure we mean everything that is related to Bitcoin, including better mobile applications, multifunctional digital wallets, higher security, easy to use interfaces, fresh use cases, and improvements in the overall Bitcoin system. All of this contributes to the Bitcoin network’s value. The technology will advance even though there are some questions pertaining to the block size and adaptation of Bitcoin to everyday life. With the increasing amount of users, the cost of Bitcoin will also see a hike.
A few nations around the world have now started adopting Bitcoin in their legal framework. These countries have welcomed Bitcoin in the physical financial world and have accepted it as an economical way to modernize their financial services. This builds trust in cryptocurrency and makes it more attractive to general public.
Some of these countries include Estonia, the United States, Denmark, and Sweden. Besides, the Netherlands, Finland, Canada, The United Kingdom, and Australia also belong to the states interested in implementing Bitcoins. All these countries have their individual features, which can allow the extensive use of Bitcoin in the respective nation.
The regulations are not harsh and the access to the technology is high. That is why Bitcoin firms are on a rise in these countries. Cryptocurrencies, as well as Bitcoin, have strong communities there. Additionally, a wide assortment of startups, as well as conferences, is pushing the Bitcoin ecosystem to a whole different level altogether.
The Bitcoin price is set to augment in the near future because of all those aspects mentioned above. It is one of the many cryptocurrencies available on the market; but nevertheless, it is the highest grossing one and is on the top since its invention.