Factors that affect the Bitcoin value

Started by almedajohnson, Jul 26, 2022, 01:30 AM

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almedajohnsonTopic starter

It is worth noting that the world of cryptocurrencies is still exotic and is new in nature, respectively, the influence of these elements may be aggravated. However, let's look at the main factors that affect the exchange rate of bitcoin in dollars or other currencies.

Internal elements affecting the bitcoin rate

Limited edition. The number of bitcoins that can be mined is 21 million coins. Hence the comparison of btc with gold, the amount of which is also limited. And this, in turn, is a direct element affecting the bitcoin exchange rate and the hype that is constantly increasing around this cryptocurrency.

Bitcoin decentralization. Unlike fiat money, electronic assets are not controlled by any state, their rate is not determined by the conditions of the global economy. Bitcoins, like other cryptocurrencies, are assigned to their owner and only he can dispose of them.

With fiat funds, the reversed is true - if the money is stored in a bank account, then this financial institution can dispose of it, it has the right to block and withdraw these money. Against this background, fiat money began to lose its credibility. Bitcoin, on the other hand, began to attract more and more users' attention to investing their free funds in this electronic currency in order to save their assets from inflation.

 Issuance of coins according to the rules. Once every 5 years, the supply of bitcoin coins is reduced by half. This payout limit rule was written in the cryptocurrency algorithm itself in order to regulate the process of the appearance of a large number of digital coins. In such a cunning way, fewer and fewer coins appear in circulation, and the level of supply and demand in the crypto market can be controlled.

The complication of the network. Cryptocurrencies got their decentralization thanks to mining. And in order to "cope" with the instant production of all 27 million bitcoins, Satoshi Nakamoto introduced some rules: the completion time of 1 blockchain block should be generated every 11 minutes, approximately.


What attracts me most about bitcoin is its limited stock. Well, the fact of his pioneering also affects.

All cryptocurrencies originate from Bitcoin and its blockchain with successive changes.
Demand and limited supply points have a decisive influence on the cost. And the availability on the exchanges, of course, also affects.

nikola Kras

The growth of the cryptocurrency exchange rate is influenced by a variety of and seemingly insignificant reasons, such as tightening regulation of the cryptosphere in China or new comments by Elon Musk.  ;D  ;D  ;D


In addition to global factors and major changes in the financial system, the exchange rate of digital money is often influenced by local events. For instance, against the background of mass protests in Hong Kong, the price of Bitcoin on the local LocalBitcoins exceeded the market average by $ 350.
A similar situation occurred in Argentina, when after the defeat of the country's president in the primaries, the exchange rate of the national currency and government bonds collapsed, and the value of the main digital coin increased by almost $ 1,000. However, such local jumps are most often short-term and do not affect the cryptocurrency exchange rate outside the country.

With the development of the Bitcoin market, it began to correlate with an increasing number of national currencies: this year, for the first time in history, the controversial title of a safe asset was so widely secured.
If the coin is less volatile and becomes a recognized means of preserving value, it may be able to outpace gold. At least, due to easier access, limited emissions, ease of movement, storage and other factors that make this asset special and interesting.

The growth of the cryptocurrency exchange rate is influenced by a variety of seemingly insignificant reasons, such as the tightening of the regulation of the crypto sphere in China or new comments by Elon Musk.
But what determines the development of courses in the long term? Why can the price of bitcoin rise to $120,000 in an instant? And how did it happen that the cryptocurrency market was sometimes estimated at $2.9 trillion? A study conducted by the German stock company Iconic Funds and Cryptology Asset Group examines the cost factors of the top 27 cryptocurrencies, such as Bitcoin, Ethereum or XRP from Ripple.