With people keen to invest in Bitcoin, there are many things a potential investor should think about when taking the plunge and buying into the Bitcoin dream.
In this article we look at 10 factors that are affecting the current Bitcoin price as well as the overall crypto market.
The first and foremost thing that is affecting the value of Bitcoin currently is its previous performance. Many people see Bitcoin as a relatively safe (albeit expensive) bet, primarily because in the past it has performed strongly over long periods of time. Discounting times where it has surged and crashed, ultimately Bitcoin has risen tremendously in value since its inception.
Coupled with the historic value is the hype. Bitcoin has a lot of media attention (some positive, some negative), and there is no such thing as bad publicity in the crypto world. Bitcoin has started to edge its way into the everyday conversation among people that ordinarily wouldn’t even think about cryptocurrency.
This continued prevalence in the media is doing a lot to bolster Bitcoin as a mainstay currency with the potential to become mainstream.
Behind the actual coin is the blockchain platform that Bitcoin uses as a ledger for its transactions. This technology is innovative and sought after across many industries - from logistics to healthcare - as companies all over the world are looking for secure ways to store information. Because the technology behind the coin is strong, it remains at the top of the crypto charts.
The factor that has a potentially negative impact is the emergence of other crypto coins. There are now hundreds of altcoins on the crypto exchanges. Some of them are truly incredible, and there is a real possibility that one of them at one point will usurp Bitcoin of its crown. As people begin to use Bitcoin more, it also serves as a gateway to the use of altcoins, which could again see Bitcoin’s use reduced.
This is probably the single biggest threat to the overall survival of Bitcoin, so it is well worth brushing up on your altcoin knowledge.
Private Sector Investment
There have been a lot of private companies pouring a lot of money into crypto and blockchain technologies. Bitcoin has had its fair share of helping hands over the years, and it is not by coincidence that it currently holds such a high value.
On the flipside of the coin (no pun intended), companies like Apple have been quick to dismiss Bitcoin and other large tech firms like IBM are investing heavily in competitor coins. This could play a key role in the value of Bitcoin over the coming years as more and more private tech firms look to invest in crypto and also maybe, further Bitcoin development.
Now, more so than ever, social media is playing a vital role in the way we interact with people and the world around us. Not a single day goes by without Bitcoin coming up somewhere in the social media news feed. This kind of exposure is fantastic for Bitcoin, cementing it in our minds as a credible and trusted currency.
Bitcoin success stories frequently go viral on social media, and people are keen to buy into it because they have a friend of a friend that made a lot of money with Bitcoin.
Initially, Bitcoin was traded in relatively shady and obscure marketplaces, but as of late, the coin has been traded in common marketplaces and more vendors are keen to exchange Bitcoin for goods and services. Some freelance workers even conduct their trade in return for Bitcoin.
This gives it a boosted value. Investors have now got the option to not only save Bitcoin but also to purchase something, which is now a commonplace avenue. Real world shops even take payment in Bitcoin, which does nothing but improve its performance as a currency.
If you’re hoping to mine Bitcoin, we are sad to say that the ship has sailed unless you have some very specialist equipment at your disposal. Because it has become increasingly impossible to mine Bitcoin, the supply of the coin has dropped considerably. Couple this with a very high demand, and it is clear that Bitcoin has become a commodity.
This trend is set to continue as the coin nears its supply limit. Upon reaching it, there is a real possibility the value could rocket.
Government Policy Making
The various stances governments are taking on cryptocurrency have caused a lot of controversies worldwide is. With some governments imposing tough regulations and enforcing taxation and others completely outlawing the trade of Bitcoin, the regulations are likely to be detrimental to cryptocurrency.
With Bitcoin being the poster child of the crypto world, it is drawing a lot of scrutiny from regulatory bodies all over the world, something that thus far hasn’t been altogether positive.
It is safe to say there are many factors affecting the value of Bitcoin, some are relatively straightforward and easy to anticipate while others have a rather uncertain effect. If you are considering investing in Bitcoin, then it is always valuable to research as much as you can about the coin and the various things that can have an impact on its value.