Bitcoin price is influenced by every individual in possession of the currency and every subject on the market. Entire community affects the price of Bitcoin. Bitcoin is something else, but it is a market as well. And as a market it has its own rules. Basically, on every market, including Bitcoin, rule the laws of supply and demand. When supply is larger than demand the price will drop. When the demand for Bitcoin is larger than the current supply – the Bitcoin available for purchase on the market, the price goes up.
Nevertheless, these rules are under constant influence of business occasions which are created by the market subjects – people, exchanges and other businesses, but global society as well. Here are some of the key factors that influence the price of Bitcoin.
Through media almost everyone can be reached. So, media has the considerate power in reaching those with Bitcoin. That way, media hype can be easily created which will influence the price of Bitcoin to go up, since almost everyone will try to buy Bitcoin. Again, the demand for Bitcoin rise above the supply and the price will simply go up. Available Bitcoin is more desirable and in the people’s eyes and it will worth more. Same way, negative publicity will turn people away from Bitcoin and the supply will be bigger and bigger. The negative run will affect those in possession of Bitcoin to rapidly sell them as the price goes down which will create even bigger supply and the Bitcoin will be worth even less. This is pretty much the mechanism behind market crash.
Regulations made by governments can affect the price in numerous ways. Any statements by the officials or similar acts by the men in power will affect the Bitcoin enthusiasts to revalidate their opinions. For Bitcoin development it is important to remain resistant to the government influences since the government has interest in disrupting the Bitcoin economy. Bitcoin is a great threat to the traditional currencies, or how they are called “fiat”. The threat lies in the fact that no central institution has the control over Bitcoin and the fluctuation of value within. Negative politics toward Bitcoin will turn people away from it and the adoption will be slower.
For Bitcoin, it is at utmost importance to become a matter of everyday life. Yes, Bitcoin is getting more accepted day-by-day but mostly by innovators and early adopters, Bitcoin still has the difficult task of getting accepted among the common people and those who are a little bit more conservative. Government regulations, again, also affect the adoption since any negative opinion by government will compromise with the possibility of Bitcoin adoption. People get frightened. As Bitcoin get accepted globally it will be seen as a regular method of payment which will lead to the big increase of its value. Again, the demand will rise and the price will go up.
Besides these three important factors that shape the price of Bitcoin on daily basis, there are numerous other ways in which the price gets affected by market occasions. Price will go down when major businesses start selling Bitcoin for fiat currency as the supply on the market will be greater. Technological break-through will lead to the development of the network, Bitcoin will get more desirable and the demand will rise. Prices will go up.
There are many other factors and they can’t be all listed here since the Bitcoin network is huge and its getting bigger every day.