When it comes to the cryptocurrencies, Bitcoin can be considered as one of the most popular Cryptocurrencies available. Bitcoin trading is also getting really popular day by day as well. In fact, nowadays, Bitcoin is also used in the online marketing as well. Despite the high popularity, the price of the Bitcoin is really volatile and it does fluctuate by a huge margin. Hence, if you are interested in trading with Bitcoin, in Bitcoin exchange then you should have an idea about Bitcoin value. Simultaneously you have to know the reasons why the price fluctuates so much. In the following discussion, we shall talk about the reasons which cause the fluctuation of the price of Bitcoin.
The factors that influence Bitcoin value
A Couple of months back, the price of one Bitcoin was around $3500. However, the price has changed by a huge margin since then. A month back, in the midst of October, the price of one Bitcoin suppressed the mark of $5000. And a Week later it reached the mark of $6000. In recent times, the price of Bitcoin is hovering over the $7000 margin. Therefore, the price of Bitcoin has varied by over 600 percent since the start of the year. Therefore, if you are interested in trading with Bitcoin, then it is very important for you to be aware of the variable Bitcoin value. Otherwise, you may face difficulties while trading with Bitcoin.
Many financial experts are considering the dynamic nature of cryptocurrencies as the reason of variable price of Bitcoin. At the same time, the rising popularity of Bitcoin can be considered as another reason. Along with these two obvious reasons, there are some other factors which can influence the price of Bitcoin as well.
Institutional investors are getting interested
Three or four years ago, the situation around Bitcoin was completely different. Then at that time, the Bitcoin value was comparatively less and hardly any financial institutions were interested in the cryptocurrency. However, it seems like, the situation has changed a lot since then. Nowadays, banks and other institutional investors are getting interested in Bitcoin and simultaneously they are selling the cryptocurrency as well. As the banking sectors have started to take an active part in the trading of the Bitcoin, there is more trade around the Bitcoin. The demand for the Bitcoin is also getting increased as well. As the demand for Bitcoin is getting increased the Bitcoin value is also getting increased as well. Therefore, the participation of financial institutions can be considered as one of the major reasons behind the fluctuating Bitcoin value. It is expected that, as the time progresses, the more financial institutions will be interested to take an active part in the Bitcoin trading. Therefore, if you are interested in Bitcoin trading, then you have to be prepared for the variable Bitcoin value for the upcoming time.
Interest from other continents
At first, Bitcoin has less interest from the other continents including Aisa. However, things have changed a lot in the last couple of years. Now More Asian countries are taking interest in the Bitcoin and they are willing to trade in Bitcoin. Therefore, a large market is getting interested towards the cryptocurrency. Therefore, it is obvious that Bitcoin value will be impacted due to this interest. Different Asian countries like Singapore, South Korea, Malaysia and the Philippines are getting interested in the Bitcoin trading. Different banks in those countries are also considering Bitcoin as a good trading option. Therefore, this change has worked as a catalyst in the Bitcoin exchange. Financial experts are also considering it as one of the major reasons for the change in the Bitcoin Value.
Along with these two crucial reasons, there is another reason which can cause the Bitcoin value to fluctuate. And another cause is legality. Though Bitcoin is getting popular in many countries across the globe, however the legality of Bitcoin trading in some countries is still not clear. Therefore, it can be understood that people from all across the globe can’t participate in the Bitcoin trading actively. Along with that, any major legal decision regarding Bitcoin can have a good impact on the Bitcoin exchange as well. As Bitcoin trading is not legal in many countries in the world, it does affect the Bitcoin trading and the Bitcoin value as well.
The whole base of Bitcoin is online
It is obvious that whole base of Bitcoin is based online. The online marketplace is really volatile and at the same time, security is a major question when it comes to the online marketplace. It is obvious that online marketers can get hacked at any moment in time. Therefore due to this, the value of the Bitcoin can get reduced. When the MtGox was hacked the Bitcoin value was reduced to $400. Along with that when DDOS attacked the stock exchange the price of Bitcoin fluctuated by 6-12 percent.
Trust can be considered as one of the key parameters when it comes to Bitcoin. There are many countries which are showing trusts in the Bitcoin. Simultaneously some countries have sanctioned Bitcoin as a payment mode as well. Countries like Australia and Japan have approved Bitcoin as a payment mode. Therefore, it can be said that some of the developed countries have started to show faith in the cryptocurrency. As the faith on the Bitcoin is getting increased the Bitcoin value is also getting increased. So, it can be assumed as the more countries are getting interested in the Bitcoin, the value of the Bitcoin will get an increase as well.
Bitcoin is still in the developing phase
Although the people all around the world are getting interested towards the Bitcoin, the Bitcoin is still in the developing phase. Therefore, it is obvious that the Bitcoin value will fluctuate. As the Bitcoin will be more developed the price of the Bitcoin will be more stable. Therefore, financial experts are considering the current phase as one of the reasons that impact the price of the Bitcoin.
More knowledge on the Bitcoin
To be honest, Bitcoin as first introduced to the world in the year of 2008 and it broke into the market around 2010. Therefore, it is fair to say that Bitcoin is fairly new to the market. As the Bitcoin is fairly new to the market there are fewer people know about the cryptocurrency accurately. To be precise, It is the younger generation who are aware of the Bitcoin. At the same time, people who are over 50 years are not so aware of the Bitcoin and therefore, there is a knowledge gap. It is expected that with the upcoming year’s people will get more educated on the Bitcoin and they will come to know what Bitcoin is all about. As there is a knowledge gap in regarding Bitcoin the price of the Bitcoin varies in the Bitcoin exchange.
Participation of different countries
The worldwide economic status plays a very important role when it comes to finalizing the Bitcoin value. There are some countries who participate in the open economic transactions. At the same time, there are some countries with a very closed and narrow economy. As the different countries all around the world look to participate in an open economic exchange, the price of the Bitcoin will increase significantly. And with an increasing price, the price of the Bitcoin will be a lot more stable as well.
So, right now, there are a lot of reasons who are causing the fluctuation of Bitcoin value. However, it is expected that with the growing time and knowledge, the price of the Bitcoin can come to a stable range in the future. Along with that, the trading with Bitcoin will be a lot more stable.