Cryptocurrencies remain a great mystery to many people. Especially the price of Bitcoin, although there are more and more people interested in this topic, there are always doubts to be resolved and it is common that many still do not know what gives value to digital currencies.
With perks like near-instant trading, a secure platform, and an ever-increasing price that makes them a good investment, digital currencies took the market by storm and haven’t stopped doing so ever since. Of course, there is always room for doubt, especially when you are just starting out.
When investing in Bitcoin or any other Cryptocurrency platform, you will almost certainly be looking for information on what underpins the price of digital currencies to know whether or not it is a good investment. When reviewing the price history of Bitcoin, the most notable thing is that the value of the coin has only gone up. Thanks to this, more and more people are choosing to invest in the purchase of this crypto asset to increase their capital in the medium term without lifting a finger.
If you are interested in adquiring this virtual currency, it is important that you take into account that each Bitcoin is divided into 100 million satoshis (the equivalent of cents of this currency). This means that the minimum amount of the purchase is not a Bitcoin, in fact most transactions are much lower than this amount and result in the management of satoshis.
Most objects or services have a price calculated based on their supply and demand, much of it applies to digital currencies, of course there are more factors at play when changing their price to the public.
The price of Bitcoin is not set by anyone in particular. It is established by the market; this makes pricing coins more complex because prices will vary depending on the exchange. As an example, you can search for a Bitcoin price on the Internet and despite having the same established price, when it comes to selling it it varies on each buying and selling platform, some have cheaper prices than others (Bixxus, Localbitcoins, Buda).
The price of Bitcoin is very volatile, in part due to the liquidity (the ability to buy and sell quickly) of the currency. The amount of bitcoin flowing through the market at any one time gives investors the ability to quickly enter and exit positions.
The Bitcoin market is influenced by many events. If it leaks out that a big government is unsure how to regulate bitcoin, as was the case in China, the price may drop. There are also other factors that affect bitcoin prices. There are only a few bitcoins available and they are produced at a predictable rate. Ownership of those bitcoins is unevenly distributed: some bitcoin giants have huge reserves of the currency in their wallets. That, combined with liquidity, makes it easy for people to manipulate the market.
Factors that influence its price
Here are some of the factors that influence the price of Bitcoin:
- Bitcoin supply and market demand.
- The cost of producing a Bitcoin through the mining process.
- Rewards issued to Bitcoin miners for verifying transactions on the Blockchain.
- The number of competing cryptocurrencies.
- The exchanges with which it is listed.
- Rules governing its sale.
- Your internal government.
The truth is that there is no source with specific information about the price of Bitcoins around the world.
Each platform has a certain price, however, this price is usually very similar between all Trading systems.
For this reason it is important that before acquiring your Bitcoins, you research the prices and options well, that way you can choose the seller that suits you best.