Bitcoin prices are affected by various factors. The rate of inflation, monetary policy and the rate of economic growth that affects Fiat currencies are not true for Bitcoin. It’s not easy to guess the price of Bitcoin. However, it is influenced by factors that we will examine.
Supply and demand
One of the factors influencing Bitcoin price changes is the supply and demand of the market. The Bitcoin protocol allows new bitcoins to be created at a fixed rate. Increasing bitcoin supply can cause inflation and lower prices. This type of bitcoin loses its value. Whenever available bitcoins are less than market demand, their value increases.
Competition between digital currencies
Bitcoin is the most popular digital currency. Coders such as Atrium, Ripple, Bitcoin Cash, LightQueen, etc. are at lower levels of popularity. Also, coins with initial supply are constantly increasing due to the lack of many barriers to entry. This bustling market is good news for investors. Because widespread competition reduces prices. Even though Bitcoin has a better position than its competitors.
The role of digital currency exchanges in Bitcoin prices
Investors of digital currencies exchange through various exchanges such as Bainance. Exchange platforms allow investors to exchange digital currencies and fiat according to Bitcoin price forecasts. The more popular and accessible the exchange, the easier it will be to create a network of participants. So by investing in your market, you can set rules for adding other currencies. And that affects the price of bitcoin.
Rules and legal issues
The growing popularity of cryptocurrencies has forced lawmakers to impose regulations on digital assets. The Stock Exchange and Securities Commission considers digital currencies to be securities. However, the Commodity Futures Trading Commission considers it a commodity. The confusion that has engulfed lawmakers has fueled uncertainty in the market despite rising capital. In addition, the market is witnessing the presence of many financial products that use bitcoin as a major asset. This affects the price of bitcoin in two ways. First, it provides investors with access to bitcoin, which increases demand. Second, it can reduce fluctuations.
Bitcoin price forecast
It’s really hard to predict the price of bitcoin. But the predictions we see on the Internet are many. Even some financial market giants believe that the price of Bitcoin will fall below $ 100 in the next few years. We just have to wait and see which predictions come true. Given the popularity of Bitcoin, it is very unlikely that the price of Bitcoin will fall or disappear