Recent years have definitely seen the rise of bitcoin and in particular the amount of money that it is worth represented by the bitcoin price. Knowing when to buy and sell can be difficult but understanding the factors that affect the bitcoin price can help. Carry on reading to discover exactly what they are so that you can make wise investment decisions.
4 factors that affect the bitcoin price are as follows:
The crypto currency market is fickle and reputation within it is very important. Positive media coverage of Bitcoin will likely drive the bitcoin price upwards. The Bitcoin price exploded in 2017 and that was largely due to the hype surrounding it and increased coverage in the mainstream media particularly.
Current politics can greatly affect the price of all different currencies, including the Bitcoin price. When the currency of a certain country goes down or weakens due to political drama, this can often make people want to invest in something else, which is often Bitcoin. It’s interesting that around the time Donald Trump was elected as president, the bitcoin price rose dramatically. This was largely attributed to the uncertainty of the American economy during this period.
Regulation is inevitable and this includes Bitcoin. Regulators around the world make decisions about things like tax and other things regarding the currency. Their decisions are always changing and can have a big impact on the current price of bitcoin – positive or negative.
There are many types of investors in the market with different objectives. Some will buy a large amount of Bitcoin just to make it LOOK like the prices are rising before dumping it back on the market. This is often referred to as the ‘pump’ and ‘dump’ brigade, which is something important to watch out for.
So there you have it, 4 factors that affect the bitcoin price. The market is evolving and changing rapidly so investors must be savvy. It’s important to take a longer-term view. In the short term the Bitcoin price is very volatile, often with huge swings positive and negative in a 24-hour period. The elements that affect the fluctuations in the price of bitcoin change all the time so it’s important to always be aware of the external influences at play.