What is the first thought that comes to your mind when you hear the name Bitcoin? Most traders associate it with an incredible jump in price in the first place. Within a period of 10 years, its value grew from a few cents to around $70,000. And that is the key fact that propels the demand for it. Yet, due to all sorts of gossip and false prejudices, many beginners cannot dare to make such an investment and miss considerable profits.
Bitcoin was the first cryptocurrency to enter the market. This event took place more than a decade ago ― in 2008. So, over this period, traders and investors had an opportunity to make sure that this asset was substantial enough. Its value and impact keep on growing year after year. Yes, there are certain perturbations from time to time, but the situation recovers stability every time as well.
It is well-known that this crypto is decentralized and cannot be controlled by any governments and banks. Then, how is the Bitcoin price formed? There are 8 factors:
1. Long-term investment volumes. The higher demand, the higher the rate.
2. Short-term trading activity. This crypto is characterized by increased volatility, which allows speculators to make good money from its daily fluctuations. Every day, one can watch billions of bubbles and liquidations in the corresponding charts. That provokes extra fuss and panic, which attracts more traders and pushes the rate higher and higher.
3. Development of decentralized finance. New inventions in the sphere of blockchain contribute to the value of this crypto.
4. Popularization of Bitcoin as a payment means. It is already supported by PayPal, Visa, and Mastercard.
5. Decisions and announcements made by governmental bodies and politicians. Although they cannot have a direct influence on its rate, such news makes a huge fuss.
6. Statements made by celebrities, big businessmen, and influencers. The most commonly known example is Elon Musk.
7. Reductions in refunds paid to miners. Such procedures are predetermined by the code of this crypto. They took place once in 4 years (approximately). And, according to statistics, within 1.5 years after such a reduction, the price of the crypto grows by several times. So, for the latest time, it was executed in May 2020. At that point, the rate was around $10,000. And 1 year later it reached $60,000.
8. Growth of its user base. The more wallets, the higher the value.
In sum, as of now, there is no single opinion on whether the rate of this coin will move upwards or downwards, although there are many proofs in support of the first variant.