I'd add another point, OP: the stock market. In the last 3 days we've witnessed a significant decline in the price of stocks that was more or less mirrored by Bitcoin and other cryptocurrencies. Last time it happened it was Spring when the pandemic was announced and bitcoin followed the stock market to a short-term bottom.
IMO Bitcoin is not an independent system, even though crypto anarchists would like it to be one.
Topic: What affects the price of bitcoin and other cryptocurrencies - page 3. (Read 627 times)
September 04, 2020, 10:16:09 AM
September 04, 2020, 09:50:57 AM
Frankly speaking the price of Bitcoin and especially the cryptocurrency market at the moment is controlled by Whales. The Marketcap of the cryptocurrency market is not that much at the moment.
If you compare it with the stock market.
It will take time for the market to evolve, still the market is much stable as compared to what it was in 2017 and before. I am not an analyst but it is a simple math if you know the market.
If you compare it with the stock market.
It will take time for the market to evolve, still the market is much stable as compared to what it was in 2017 and before. I am not an analyst but it is a simple math if you know the market.
The prices of cryptocurrencies have been going up and down since it was created and there are so many factors that can make the price fluctuate that way and i will be identifying such factors below:
1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price
2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.
3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.
4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.
5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them
I agree with the first point and with the second one. However, I don't think that the last three are particularly important. #3 won't affect the price much if the country is not among those where Bitcoin is the most used coin or if the media does not give broad coverage of the story. So this can largely be added to point #2. As for the number of users, I don't think it affects the price significantly, not anymore. There are more users now than there were in 2017 (right?), but the price is way lower. And regarding the issues with the technology itself, it might affect the price in the future, but I don't think it affected it yet. 1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price
2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.
3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.
4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.
5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them
This topic has been discussed at length previously but yet it finds its way back here.
The only thing that directly affects the price is demand/supply. If people are buying it more its price will rise. Supply is still fixed, so supply will be the reason why price rise even more in future. It is deflationary after all.
Rest of them all, political news, governments banning stuff - all have an indirect effect through the attitude of the traders. Inorganically created demand to raise price does not stand for long as we all have seen, good example is the 2017Q4 pump.
The only thing that directly affects the price is demand/supply. If people are buying it more its price will rise. Supply is still fixed, so supply will be the reason why price rise even more in future. It is deflationary after all.
Rest of them all, political news, governments banning stuff - all have an indirect effect through the attitude of the traders. Inorganically created demand to raise price does not stand for long as we all have seen, good example is the 2017Q4 pump.
This is absolutely true.The key is understanding what causes the demand,and the level of demand at any particular time, because with Bitcoin, we already know the max supply and can closely estimate the circulating supply.
I'd like to think of it actually as only Supply and Demand being the direct factors affecting BTC price, while the rest of the factors affect the demand for it. Ofc, an easy explanation would be every factor possible affects BTC in general, but I'm pretty sure such a notion is pretty wrong. It's like Supply and Demand 100% affects the market, while the rest have a 50/50 chance of actually affecting not the Supply ofc, but rather the demand. This makes it a lot clearer that the rest of the factors except for supply and demand aren't really accurate most of the time, and could actually prove to be opposite of what most actually speculate it to be.
This topic has been discussed at length previously but yet it finds its way back here.
The only thing that directly affects the price is demand/supply. If people are buying it more its price will rise. Supply is still fixed, so supply will be the reason why price rise even more in future. It is deflationary after all.
Rest of them all, political news, governments banning stuff - all have an indirect effect through the attitude of the traders. Inorganically created demand to raise price does not stand for long as we all have seen, good example is the 2017Q4 pump.
The only thing that directly affects the price is demand/supply. If people are buying it more its price will rise. Supply is still fixed, so supply will be the reason why price rise even more in future. It is deflationary after all.
Rest of them all, political news, governments banning stuff - all have an indirect effect through the attitude of the traders. Inorganically created demand to raise price does not stand for long as we all have seen, good example is the 2017Q4 pump.
To sum this up,
What affects the prices of cryptocurrencies is what affects the people that builds the crypto market. Every people take things differently, one will pull his bitcoin out coz he see a 5% mark down to the price while the other will put more money because of the lower price. One investor will pull his investment out of the coin coz he sees a 20% mar down while the other put some more taking advantage of the lower price. One will withdraw his funds out of a project coz it got involve in a scam while the other will not touch his funds until further news have been reported. I guess what crypto is all about is the people's behavior.
What affects the prices of cryptocurrencies is what affects the people that builds the crypto market. Every people take things differently, one will pull his bitcoin out coz he see a 5% mark down to the price while the other will put more money because of the lower price. One investor will pull his investment out of the coin coz he sees a 20% mar down while the other put some more taking advantage of the lower price. One will withdraw his funds out of a project coz it got involve in a scam while the other will not touch his funds until further news have been reported. I guess what crypto is all about is the people's behavior.
As what the OP mentioned, the btc price is affected by those factors. We can't pinpoint only one as the contributor because it is the product of several factors in the market. Even when there is FUD or FOMO, they are just part of the game but they are not exactly the only contributing factor that affect the btc price. So in short, btc price is dictated by several factors and that we can't consider only one factor at a given time.
You also have to understand that bitcoin is a speculative asset. As such, there could be some we will spread negative news like FUD so it drives the market price to go down. And then when we have exaggerated news, price appreciates and everyone wanted to join the FOMO.
To sum this up,
What affects the prices of cryptocurrencies is what affects the people that builds the crypto market. Every people take things differently, one will pull his bitcoin out coz he see a 5% mark down to the price while the other will put more money because of the lower price. One investor will pull his investment out of the coin coz he sees a 20% mar down while the other put some more taking advantage of the lower price. One will withdraw his funds out of a project coz it got involve in a scam while the other will not touch his funds until further news have been reported. I guess what crypto is all about is the people's behavior.
What affects the prices of cryptocurrencies is what affects the people that builds the crypto market. Every people take things differently, one will pull his bitcoin out coz he see a 5% mark down to the price while the other will put more money because of the lower price. One investor will pull his investment out of the coin coz he sees a 20% mar down while the other put some more taking advantage of the lower price. One will withdraw his funds out of a project coz it got involve in a scam while the other will not touch his funds until further news have been reported. I guess what crypto is all about is the people's behavior.
All of those factors given above are just common that do really affect crypto market but theres no assurance or proof when it comes to fundamentals
but surely it will always reflect or depend out on that basic supply and demand thing but determining it earlier or knowing the possible movements ahead
then its already an impossible thing for someone to know.As a trader or investor then you should at least consider on using up these infos for your own
benefits or utilizing it on your investment decisions.
but surely it will always reflect or depend out on that basic supply and demand thing but determining it earlier or knowing the possible movements ahead
then its already an impossible thing for someone to know.As a trader or investor then you should at least consider on using up these infos for your own
benefits or utilizing it on your investment decisions.
The prices of cryptocurrencies have been going up and down since it was created and there are so many factors that can make the price fluctuate that way and i will be identifying such factors below:
1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price
2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.
3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.
4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.
5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them
1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price
2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.
3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.
4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.
5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them
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