Bitcoin is the leading cryptocurrency that has experienced some volatile ups and downs in its short history, with a peak of over $17,000 in December of 2017. The current market value is just over $4,000, and the experts are predicting steady growth in 2019, but what are the factors that influence the price of Bitcoin?
- Market Hype – When investors either buy or sell based upon rumours, this causes the price to rise or fall, and much like other commodities, there is both positive and negative media reporting on cryptocurrencies like Bitcoin. When people repeatedly read media reports that talk about the growing popularity of Bitcoin, they tend to become interested, and that interest often leads to making an investment, while if mainstream news reports anything negative about Bitcoin, this can lead to panic selling, which brings down the price. Generally speaking, serious investors do not act on the basis of media reports, yet much of the investment sector in Bitcoin is made up from individuals who do take notice of media regarding Bitcoin, and too much negativity will send prices plummeting.
- Government Involvement – While Bitcoin is a decentralised currency and therefore cannot be controlled by governments, what governments say about Bitcoin can affect the value. In April of 2017, the Japanese government announced that it accepts Bitcoin as a form of payment, which sent the price high, while, on the other hand, talk about prohibiting the use of cryptocurrencies is likely to have a negative impact on the value. If you would like to buy cryptocurrency Melbourne shops like Bitcoin Dealers are selling, they can easily be found with an online search. Once you have some Bitcoin in your virtual wallet, you can easily sell it to an online Bitcoin dealer, so it pays to keep an eye on prices at all times.
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- Limited Supply – There can never be more than 21 million bitcoins in existence, and by the end of 2018, almost 80% of all possible Bitcoins had been mined. It is estimated that by 2040, all Bitcoins will have been discovered, and like anything that has a limited supply, prices will rise. The mining of Bitcoins is regulated, to try and control the release rate of new coins into the market place.
- Political Uncertainty – Take Brexit as an example, when many investors decided to move their wealth out of the UK economy, they used Bitcoin to do this, which saw a 60% increase in Bitcoin’s value. Flat currencies like the GBP and USD are liable to fluctuate, which can send some investors into a panic, with many moving their wealth out of flat currency and into Bitcoin. There is an informative article on the influencing factors that determine the price of Bitcoin, which is recommended reading for all who are thinking of making an investment.
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According to financial experts, Bitcoin should enjoy sustained growth throughout this year, and if you have yet to add a few Bitcoins to your investment portfolio, perhaps now is a good time to buy into what will one day be the universal currency that people use all over the world.
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