Topic: How does Bitcoin transaction Really Work? Why does Bitcoin price change? - page 2. (Read 368 times)

If I get you right, I would simply say trading are Bitcoin dealers who are opinion to quick selling and quick buying of Bitcoin at any moment, they serves as the immediate demands and suppliers who does not acquire the Bitcoins to stock like the investors may do on the basic of buying, holding and accumulating for a period of time precisely on a long term with no quick selling of their Bitcoins.

Just like what others have said the value of bitcoin is actually the same which is one bitcoin equivalent to one bitcoin, it is the fiat equivalent place on it that actually varies and this is mostly done by individuals or market makers. They set the price to an amount they think is suitable for them and buyers buy for an amount they think is ok for them. Then this actually increases or decreases just like the normal commodity we have, if 10$ was placed on it and then people start selling off in large chunks for that amount (supply) then later since the supply is actually large I can buy anywhere and people are eager to sell I can just simply lower price to like $9 and this will make desperate sellers to sells since they want to just sell.

Now in terms of a demand I have this bitcoin for that same $10 and I see lots of people actually asking to buy it for an amount as a marketer it is just reasonable that I sell to them higher since they are eager to buy and I have it so I can simply increase my price to $11 to make money out from the demand as at then. This is exactly how the demand and supply chain for every product is .



If everyone holds bitcoin which I will tell you will never happen because we are all different and have different strategies to follow. But should this happen it simple bitcoin will be more scarce and we all know what scarcity causes most especially for a thing which every one wants it simply increases the price place on it,

Yes a transaction is simply a movement from one address to another which is registered or stored  on the blockchain, so lack of transactions will be bad for miners and subsequently for the network

When someone buys an object for x amount of fiat, its price becomes that only. Someone might want to buy it at y(where y
When orders are coming one after another the last traded price is the last one from the data from all exchanges being monitored by an aggregator website like coingecko and others.

I can decide to sell bitcoin at a hefty z price (z>x>y) but then I would not get any buyers unless some fool wants to price it so much and then the z becomes the price.

To be honest, fiat prices are set by the buyers and sellers, 1BTC is always 1BTC there is no "standard" to compare it in fiat.

Many people think that if everyone holds Bitcoin, the price will go up because the demand on this coin is growing but I personally think that if we all hold Bitcoin, then this coin will die. What's the point of having money if you don't use it? There no point because money needs to be in circulation, constant transfer is what makes and keeps it active, you buy things with Bitcoin, you fund business with Bitcoin... This is the lifeforce of Bitcoin and every currency to my mind because Bitcoin is a payment method, by holding it, we will kill it as a payment method.

Most of today's trading is done on centralized exchange. We deposit coins on one exchange, this exchange collects it and gives us the opportunity to buy/sell Bitcoin without making an on-chain transaction. It's traded virtually on the platform.

I think that price is created mostly by whales. I pay $617 in 0.01 BTC because that's the current price, not because I think it is worth it. Btw I got your point.

You asked a very nice question, more like a newbie question to me though, but sometimes we just have to speak our mind and get answers. Well price, price, price, most people don't actually understand what moves the market. Yea we most times say demand and supply moves the market but then, what actually is the demand and supply we speak of? It's literally me and you. The people participating in the global market are the ones driving the market.

The movement we see are just a narration of their actions. When we buy or sell Bitcoin, we are in one way or the other creating a kind of liquidity. This liquidity is where our money lies and it's like a fuel for the market. When the market has enough liquidity from either the buy side or the sell side, it drives faster more like a respond to what created it. Now looking at the market when let's say the sell side liquidity has been fueled, the market then dips. Again,some investors gets scared after seeing this then rushes to sell off. This then adds even more fuel to the market creating the dips we see... And not until the buy side has enough liquidity to push the market back upwards, the dip will still hold its stands.

Now let's come to what happens when everyone holds.. it's obviously is going to put the market on hold too. Just use my explanation for how price moves In the market using peoples actions. Now what happens when there's no action from anyone because we are all holding? Price will remain stagnant. But truth told, it's likely not possible for everyone to have same mindset and hold their coins. Some will get scared when the market remains on a spot, businesses will want to purchase shares, and no one will want to remain in an investment where the price is stable..

To be honest, the market is broad like I said, and works more like an ecosystem. Bitcoin needs other cryptocurrency or forms of currency for it's Market to buy or sell. Same as others need it to move also in price crating the liquidity in the market. If no one is selling or buying it creates a balance between demand and supply literally equating price to zero. I don't know if you get what I mean. Though this is the way I see it from my experience with the market.

When bitcoin is being moved to an exchange, the market interprets it as an intention to sell and that can have a negative impact on the price, but of course, it has to be a large/significant number. So that will mean either a lot of people are transferring to an exchange at the same period or a very large amount of bitcoin is being moved to an exchange, just as we saw recently with the German government.
Also, the amount of transactions in the exchanges may be a factor. When more people are selling their Bitcoin they move to exchanges or convert them to stablecoins, which would mean a reduced demand for bitcoin and that might also affect the price depending on the volume.

Also, the perceived motive of the transaction is a factor. Moving a bitcoin from one wallet to another can affect the price if the market feels the owner(s) have a motive to sell. If a wallet with a large sum is transferred to another wallet that the owner is known for buying bitcoin, the market might interpret it as a sale and that could also affect the price.
Generally, I feel it all boils down to how the market interprets the transaction, that is why FUD plays a role.
 

Since we're speaking hypothetically, if everyone holds their bitcoin including the institutions and exchanges who hold the most bitcoin, I believe bitcoin price will hult at the last traded price. It won't go up or down until someone decides to sell.


Selling or buying (trading) of bitcoin is still a transaction. You sold for a fee and you also sold for a fee and it is in the blockchain, so its a transaction.

Transactions don't affect price even it is one of Bitcoin utilities. Transactions used for payment is more meaningful and is good example of Bitcoin utility than only Bitcoin transactions between two Bitcoin wallets, without any trade purpose like paying bills, buying house ...

Transactions themselves don't affect price but purposes behind these transactions have effects on price.

Like a transaction from very old wallet can be used as fud to affect price but if you make a transaction from new wallet in 2024, people will be not panic about it.

Transactions don’t really affect the overall price. It’s mostly the trading volume that impacts Bitcoin’s price since there’s a massive amount of money flowing in and out. As for Bitcoin’s current price, it’s based on the movement within exchanges, not individual transactions.


No, it doesn't affect the price.
Yes, it’s all about supply and demand. Like I mentioned, when there’s a strong buying or selling force, it impacts the price. That’s why we sometimes see pumps and dumps—sudden spikes in buying or selling pressure. On normal days, Bitcoin’s price still moves, but it’s much less volatile.




Definitely, it’s subjective since the major reasons for price movements often involve speculation. News, whether positive or negative, especially on regulatory aspects, plays a huge role in driving Bitcoin’s price up or down.


It's bad, as it defeats the purpose of a decentralized blockchain. It’s meant for transactions, and if everyone just holds, it becomes a stagnant asset, which makes it pretty much useless.
.

Of course, all involve transactions but in different purpose. However, on exchanges, that’s where we really see price movements. Like I mentioned, when people speculate, it can easily move the price (up or down). The old saying, "buy the rumor, sell the news," is how traders operate—they’re just playing with the price to profit. But, of course, not everyone is profitable. There are also losers due to wrong predictions or judgments.


Now you know, so just HODL.


Welcome buddy, and welcome to the bitcoin world.

Well firstly Bitcoin movements is not affected by buying and selling goods or services
And then the price of Bitcoin is affected by a variety of things one of which is the supply and demand which you have already stated above another thing that affects the price of Bitcoin is the investors
If there's a news that shows that Bitcoin is going to be on a bullish trend or other things that may affect  the price of Bitcoin positively the investors tend to buy more Bitcoin and this increases the price this also works viceversa because if there's a negative news about bitcoin the investor may then decide to back out and sell bitcoin which reduces its price
There are also other things like
Inflation
Wars
Pandemic
Government policies
Well at the moment these are the only ones I can think of right now

Now for your second question yes
If everyone holds it will be bad for the market not because the price will reduce
No
But rather the price will remain stagnant and stagnation of the price will affect the growth of Bitcoin
But this can never happen
There is always someone who is going to buy and someone who is going to sell bitcoin so you shouldn't worry about that

The price is created by our perceptions, do you think 0.01 BTC is worth for $617? if you say yes, that's why you willing to sell it for $617, if you think it should be higher, you will not sell it and you're fine to wait as long as you find someone that willing to trade for x price.

No, exchanging for service not counts as a transaction.

Transaction is when you only move the coins from one place to another, not necessary you get something after moving the coins.

Exchange, trade, sell, buy, etc you name it are the same thing.

Okay so I was working on a script on Timelock
Well practicing should be better used and in the process it hit me
How does transactions affect price?

Like does exchanging Bitcoin for say a Goods or service affect price? (I doubt it does)
So what now affect price
Yes it's the forces of demand and supply
The more the demand the higher the price but how does this differ from exchanging Bitcoin for a goods or service.
I have been looking at Bitcoin from the lense of trading and just found out about that

Like am curious how's the price really affected.

I don't know if I was able to coin my question well though
But why do price move, is it subjective?

Okay this is the first, now the second I'm a fan of holding but what would happen if everybody holds Bitcoin
'If' that is hypothetical. Wouldn't that be bad for the Blockchain.
.
Moving Bitcoin from one wallet address to another counts as a transaction
Exchanging for service is a transaction then what's trading or selling or buying.

Sorry everything is just all over the place, I'm just shocked I don't really understand this or maybe I'm just lacking Milk



I realised I was aiming for the moon when I don't even know how the Rocket works.


Thank You.