Market Analysis by AMarkets Company covering: Intercontinental Exchange Inc, CME Group Inc, MicroStrategy Incorporated, BTC/USD. Today, the excitement that drives demand for bitcoin is. Nov 07, · Bitcoin has new blood. With the cryptocurrency reaching a high not seen since December , following which it endured a month long bear market, new and unfamiliar investors are entering the Bitcoin markets. For starters, these newbies are rushing in to buy Bitcoin, creating fresh demand. This demand has to be catered to by Bitcoin’s [ ]. Jun 16, · Bitcoin volatility is also to an extent driven by holders of large proportions of the total outstanding float of the currency. For bitcoin investors with current holdings above around $10M, it is.
What drives bitcoin marketFour factors driving the price of Bitcoin
As media coverage increases and other factors are brought in, it is harder to distil the effect of the media alone. Political risk around national currencies can also affect the price of Bitcoin as people use it to hedge against price movements in a particular currency, or they need to quickly move large amounts of value out a country or currency. The economic crisis in Greece in was followed by reports of increased buying of Bitcoin by Greek citizens wishing to protect their wealth.
But nervousness about the national referendum for Britain to leave the European Union Brexit on June 23 did lead to an increase in the price of Bitcoin alongside a decrease in the value of the British pound. The pound started plummeting around May 20 The election of Donald Trump as US president was also followed by two months of steep rises in the price of Bitcoin.
Many attributed this to uncertainty in the US economy. Regulators around the world have had to catch up to the rise of Bitcoin. They must decide, for instance, how it will be treated by the tax system , or whether and what regulation applies to its use. Although Bitcoin is a decentralised currency, some decisions about how it will work or evolve need to be made from time to time. These also have an impact on the price. The software used to verify Bitcoin transactions is created by developers and is run by miners the global network people who verify Bitcoin transactions.
A new cryptocurrency — Bitcoin cash — was created and given to everyone who owned Bitcoin. Bitcoin cash software can process 30 transactions per second, four times more than Bitcoin. Not many investors in Bitcoin are coders, however, or knew what the fork would entail. There was a period of uncertainty before the fork, and a period of rapid price rises afterwards. Since then there has been another fork — to create Bitcoin gold. The attempt at a third fork was the one that failed to get support last week.
Read more: Australian regulators have finally made a move on initial coin offerings. Although we can point to these four factors as affecting the price of Bitcoin over its short life, it is a volatile and experimental technology, and is still in development.
Over the longer term it is likely to gain acceptance among investors for other reasons. For instance, it is deflationary — because there is a limited supply both in the total number of Bitcoins that can ever be created as well as the rate they can be created, the purchasing power of Bitcoin will increase over time.
However, at press time a little more than 13 million bitcoins are in circulation. The functions and uses of bitcoins are wide and many, but some specific ones are salient to price fluctuations.
The demand and supply of Bitcoins play a major role in determining its price; as you know, the higher the demand, the greater the price, provided that the supply remains unchanged. Media coverage and publicity plays another very crucial role in determining the price of bitcoins.
For quite some time now, there has been a tremendous hype regarding bitcoins, and that has hugely influenced its prices. Obviously, positive media coverage pushes the price up, negative one can make it go south in no time. It might also be said that the nature of media coverage does not matter as the more people read about it from mainstream sources, the more they are likely to invest in it. The same applies to well-known investors and businesses who express their support for Bitcoin.
It might seem unlikely that politics has a part to play in the world of cryptocurrency, but in all fairness it always does. An economic downturn in Greece has also caused the local population to heavily invest in Bitcoin and other coins, but here the consequences have been less vivid but still tangible.