Factors That Will Influence Bitcoin Value In The Future
Bitcoin is arguably the leading virtual currency whose price is influenced by many factors that determines the bitcoin value. Ideally, the exchange rate of this digital currency relative to other currencies determines the overall market value. Bitcoin has seen an upsurge in its adoption and usage in the last few years.
Here are six powerful factors that will influence bitcoin value in the future.
1. Technological advancement
Technological innovations will affect bitcoin value in the future. For instance, when PayPal integrated bitcoin into its payment system, it raised awareness considerably. The on-going technological innovations will lead to the development of new platforms that accept crypto-currencies with different applications.
2. Globalisation
Due to globalisation, an increasing number of people have opted to use bitcoin to transfer money to their friends and loved ones without the need for using a bank. Traditionally, international transaction fees and currency conversion rates are very high so Bitcoin serves as a great alternative to mitigate much of this expense that fatten the profits of banks.
3. Transition to renewable energy
The world is rapidly transitioning to more renewable sources of energy, which often can be generated at lower cost. In some countries, solar energy is already the most inexpensive energy source, and its price is falling dramatically. Cheaper energy emboldens decentralized mining and makes the system more robust.
4. A rapidly growing bitcoin user base
The number of bitcoin users is increasing every single day, yet the total amount of the available coins is limited. A rapidly growing bitcoin user base drives demand, as coins are scarce. Increased demand without additional supply means the bitcoin value of each coin should continue to rise to meet this increased demand.
5. Demand for financial privacy
Many individuals are increasingly seeking more financial privacy. In some ways it is a rebellion against the intrusive Big Brother state and not being “controlled” in their choices. An increasing number of people are opting for bitcoin (and other crypto-currencies) in the quest to achieve this. Again more users will likely translate into a higher bitcoin value.
6. Increase in the number of internet users
Research shows that nearly half of the world population has no access to the internet. However, the same study reveals that more and more people are gradually getting internet access. As more people become internet-savvy, more of them will likely learn about the virtual currency and adopt it. This will be especially likely in countries and regions where it is difficult to get a bank account.
The factors influencing the bitcoin value are diverse. Some factors are slow; others are steady. Learning about these factors and understanding them will help you cope with the price fluctuations surrounding virtual currencies. However, these tips should hopefully provide reassurance that despite the short-term volatility in the market, bitcoin value is underpinned by some strong fundamental market dynamics.
