More people and businesses continue to invest in Bitcoin despite the fact that it has an unstable market. Seven years ago, Bitcoin was introduced in the world where most people were skeptical. Today, BTC took a significant increase in its number of users day by day as it proves its vitality which is mostly in developed countries. Last year’s record of bitcoin users reached 15 million in number even though some countries like China and South Korea have banned the bitcoin market in their geographical area.
The bitcoin market has a total of 21 million bitcoin which are about to be scarce in the next few years. 80% of its amount had been mined, meaning, there are only 20% of it left for the coming years. What will happen in the bitcoin market by then is still a big question. However, its value is still noticeably inconsistent and no one knows by tomorrow whether its value will be higher or surprisingly fluctuate.
Factors affecting BTC value in the bitcoin market
1. Adoption of Bitcoin as an Asset for Financial Instruments
Some experts say that bitcoin is not a currency, but an asset that evolves in its own bitcoin market. For it to get its way towards stability, this should present itself as an investment product. When this happens, people will begin seeing the true potential of bitcoin market and more and more investors will come in. This move will then promote long-term investment and will soon boost bitcoin market price to a great deal in order to protect most of the investor’s interest.
2. “Safe Haven” Asset Reputation
A safe haven asset is defined as the type of investment which is capable of enduring the market turbulence without affecting its value. One of a great example is gold, which continuously increases its value as time goes. The bitcoin market should be like this, and it’s not far off. Some asset analyst refers bitcoin as the new safe haven because it is more on commodity rather than stocks and bonds.
3. Interest from Institutional Investors
Financial services begin offering bitcoin in custom products and services like paying bills, purchasing, and even in online sports and casino gambling in sites like Bigbook.ag. This is true especially in some European countries which even have its own bitcoin city. According to a recent report from the Bank of America, one of the attributes which affect the value of bitcoin in the bitcoin market is because of the interest of institutional investors. For instance, the Financial Regulation of Switzerland has approved a product from Falcon Bank enabling bitcoin trading among its clients.
Bitcoin has no project leader, one of its downside of this cryptocurrency. This causes community infighting especially in tackling issues like scaling. Bitcoin market needs to scale to increase its usability, make the greater number of transactions per second, and of course, makes its price stable.
5. Government Regulation
Bitcoin market investors won’t be surprised anymore on how government regulation affects its price. Every time a government issues a support or discouragement on bitcoin, its price normally gets affected in the bitcoin market. Sometimes, even though the government actions do not directly pertain to bitcoin, the impact is still felt. Restrictions or promotion on the use of bitcoin drastically changes its price in the market.
6. Stock Gamblers and Investments
It takes time before bitcoin market becomes stable. It should first work as an investment tool via gambling markets in sites like Bigbook.ag. When it finally became an investment tool, the investments typically go to products that are generally contributors to the improvement of the blockchain technology. Products like bitcoin and other IT-related start-ups are usually tools used to increase the trust to the cryptocurrency thus increasing its demand and totally affecting the bitcoin market for good.
7. Greater Use Cases
When bitcoin market finally becomes stable, one of the most benefited countries is Zimbabwe. Bitcoin traders use bitcoin as a useful financial tool to help a falling economy particularly in some of the poorest countries in the world. Similar to Zimbabwe, Venezuela also suffered hyperinflation of its own fiat currency in the last few years.
This instance forced people to embrace the bitcoin market and other cryptocurrencies. Some bitcoin experts see a positive future of the first “Bitconisation” of entire Venezuela when people continue to seek an alternative method of payment and stick to the benefits of bitcoin. Again, when the demand for bitcoin increases in a certain country, this will make the bitcoin market rises its value as well as the bitcoin price.
8. Bitcoin’s Governance
Bitcoin is decentralized and has lack of governing bodies that is why its value gets constant changes from time to time impacting its price. The bitcoin market is totally dependent on the bitcoin mining where a specialized hardware and software are used. First, a fork was created in a regular bitcoin mining, until on August 1, 2017, bitcoin had a “hard fork” and created, the Bitcoin cash. After that, another fork arises to create Bitcoin gold which later failed to get support. This directly affects the price of bitcoin in the bitcoin market denoting that in times that there are failures in the bitcoin itself, the price gets affected.
Is There A Chance for A Bitcoin Price to Earn Stability in the Market?
The price of bitcoin in the bitcoin market is directly affected by its supply and demand. There have been proposals lately that would make the bitcoin price more elastic like the Improved Bitcoin (IBC). The IBC conceptualize that “Instead of trying to control the bitcoin price in the market via manipulating its supply, why not collectively work on increasing its demand?” Another approach stated that it is not necessary to change the supply to reach a more stable bitcoin price, instead, things like size and liquidity must be preferred. Experts are continuously conceptualizing more and more approach in order to meet their goals of stabilizing the price of bitcoin in the next few years.