Bitcoin is the world’s most popular first cryptocurrency and there’s no doubt about that. Since this is a total de-centralised currency, there is no one controlling it’s price ups and downs. As days go by, the adoption of Bitcoin will slowly be rising all over the world. But, there are various factors that determine the price of Bitcoins, which includes technological and economic factors as well. Some of those technology and economy related factors are explained below.
Factors Determining The Rise And Fall Of Bitcoin
The price of Bitcoin is dependent on various technological changes and innovations. The prime example being the introduction of Bitcoin into PayPal’s payment system. PayPal is an international online payments service which introduced the use of Bitcoin in their services. This allowed users to know about the cryptocurrency and thus creating awareness of consumers among various digital currencies as well. trulycoin.com is a website that lets a person know of other cryptocurrencies too.
Not only that, many startups nowadays use Bitcoins as a source of crowdfunding for their businesses as well. Apart from that, Blockstream is another type of technological evolution that will help in boosting the value of Bitcoins to a whole new level.
The biggest economic factors for Bitcoin would be the demand and supply rule. This rule states that if something has high demand and low supply – the price will rise and vice versa. A similar thing is happening to Bitcoin. The total number of Bitcoins in this world should never exceed 21 million, and thus demand and supply are playing a big role here.
Another economical determinant would be the manipulation of the market behaviour. For example, in order to increase up the price of Bitcoin, various traders end up buying huge amounts of Bitcoins on the market, at a low price. This will create less supply and will then inflate the market price up and finally, the traders will sell their stocks at a higher price. This will naturally bring in huge chunks of profit, and will easily disrupt the whole cryptocurrency market.