Being in the number one position, Bitcoin is the precious and favorite choice of people when investing in digital currencies. There are many ways in which an individual can make the most acceptable use of this digital currency. Some people think that investing in bitcoin is not so easy, and you will need expert advice. But all these things are just the misconception of people. You don’t need to hesitate to invest in bitcoin because it is a straightforward process, and any person can do it independently.
Now a lot of people ask what influences the price of this digital currency? For your information, the standard economic factors are responsible for the value of the digital currency just like any other kind of investment, such as demand and supply, scarcity, news cycle, market trends and many more. However, since bitcoin is still a new and emerging technology, some additional factors influence bitcoin price. If you want to know about them in brief, then you should access bitqs.online
- In the latest months, government officials have made it crystal clear that they focus on the cryptocurrency world. US president Joe Biden has recently introduced an infrastructure bill in which all crypto exchanges are now required to inform the IRS of all their transactions. There are many other things related to the regulation of the cryptocurrency which can affect the value of bitcoin.
- These laws can also impact the investor’s portfolio because the key reason for using digital currency is its privacy and decentralization. You need to know that when in September 2022, China banned crypto, investors quickly noticed the downfall in the value of bitcoin. However, it has now increased again and resumed its actual volatility. So clearly, the regulations are one of the critical factors which can influence the price of bitcoin.
Scarceness of bitcoin
- You might not be aware that there is only 19 million bitcoin currently circulating in the world. In addition, the mining of bitcoin will stop when it reaches the value of 21 million. According to crypto analysts, this scarcity of bitcoin is one of the significant parts of the appealing nature of cryptocurrency. According to Alexis Johnson, the president of the blockchain public relation and even company in light node media, there is a static supply of bitcoin.
- Still, the demand for this cryptocurrency is rising at a very high speed. Other experts also say that bitcoin has value because we people think that it has value. It is the reason that everyone is buying this digital currency. The entire concept of the demand and supply of anything works best when people want things of scarce nature.
- One of the significant factors which drive the value increase of this digital currency is the adoption rate. According to Waltman, this is the rate at which people are buying and discovering digital currency. People adopt Bitcoin technology at a fast rate. If we assume that the adoption of bitcoin will keep increasing in the same way, this can help lead the value to higher and higher. According to the report from CoinShare, which is a digital asset management platform, at the current time, bitcoin adoption is increasing at the 113% rate per annum. As per this report, if people keep adopting this digital coin at the same rate, then by 2024, there will be one billion users of this digital currency worldwide.
- You should know that the CoinDesk platform also increased 45% in the number of new wallets from January 2020 to January 2021. In addition, the Coinbase platform, which is a very well-known cryptocurrency exchange, says that there are more than 73 million Bitcoin users worldwide. On the other hand, the Gemini platform released its report in which it was seen that approximately 21.2 million American people hold digital currencies. So, mainstream adoption is also a significant factor that influences the price of bitcoin.
Till now, you might have become familiar with all the factors which influence the price of bitcoin. Besides, many other factors can lead to the movement in the price of this digital currency.