Bitcoin is the first most popular digital crypto-currency whose price is influenced by a wide range of factors. Ideally, the bitcoin price is normally expressed as the exchange rate of the bitcoin in relation to other currencies. With an upsurge in the adoption and usage of this digital currency, the demand for bitcoins has significantly increased in the recent past.
Factors that affect the price of Bitcoin include:
1) Supply & Demand - At a basic level, the price movements of any cryptocurrency will be driven by its availability. The scarcer a digital coin is, the higher its price levels. In contrast, a virtual currency with an abundant supply will likely experience lower price levels.
2)Mining Difficulty - In the case of proof-of-work blockchains such as Bitcoin, the mining difficulty of a coin can also have a direct relationship with its price. A higher mining difficulty means that it is harder to mine an additional unit of a coin. This can have an impact on a coin’s perceived value, and subsequently its price, as increasing a coin’s supply will require more computing power to be used in the mining process.
3)Utility - A key factor that will affect a cryptocurrency’s price movement is its perceived utility. A virtual currency that possess no practical use will likely be viewed as having no value, which may be reflected with lower market price levels. For example, Ether’s price movements can be attributed to its perceived practical utility, that being a user’s ability to build and launch their own decentralized applications on the Ethereum platform
4)Market News - Market News can also affect a coin’s price movements. Positive or negative news reporting can be a heavy influencer of general market sentiment regarding a particular coin. Media reporting about a network hack for example is likely to drive prices down, whereas, coverage about a coin’s increasing adoption can result in positive market sentiment that drives a coin’s market price upward.
Hope this helps a little! Happy bitcoin-ing!!!
First of all, I thank you for the subtitles and details you gave. In addition to what you wrote, I would like to add the reasons for whale moves and panic sales because these two factors are one of the two major problems we often face. So if you add these factors in your own message, you are satisfied.
