Millions worldwide take part in various crypto-related work, be it mining, trading, or investing. In fact, for the millennials and the Gen-Zs, Cryptocurrency is a form of a side hustle. Just like their parents invested a part of their income on stocks, they do it on cryptocurrency. There are several reasons people choose to put their money and time on crypto than any other traditional form of investment. Some of them include – cryptocurrency’s decentralized character, ease of trading, kind of returns, and security.
The fluctuating exchange rate from eth to cad is one of the key factors that can significantly impact Bitcoin’s price
There are several cryptocurrencies and many platforms via which people can mine, buy and sell. However, the most important and the leading crypto coin is Bitcoin. Satoshi Nakamoto, the creator of cryptocurrency and modern-day blockchain technology, created Bitcoin as the first-ever crypto. Due to the popularity and loyal nature of Bitcoin holders, it is one of the safest options. Additionally, platforms such as BitQT help people in trading quickly.
However, the value of Bitcoin, much like any other crypto, keeps changing. There are several reasons behind this. Let us go through them one by one.
Factors that affect Bitcoin’s price
- The Classic Case of Supply and Demand – The value of everything in the world depends on these two crucial factors. The ratio between supply and demand of a given object or service has a massive effect on its value. The same is the case for Bitcoin. The request for Bitcoin is at its all-time high. To cater to that, miners are continuously working on producing more Bitcoins. However, sometimes, a gap might occur, and there might be a lag. Therefore, both supply and demand play a crucial role in determining the cost of Bitcoin.
- Media exposure – The media heavily influence the modern world. Apart from traditional media outlets such as newspapers, magazines, television, and radio, new forms such as social media play an essential role in marketing and advertising any product, service, or concept. The craze we have seen in the last few years is due to the extensive coverage and attention that mainstream media has given crypto. Famous people interested in investing in cryptocurrency also played a significant role in popularizing it and raising its value.
- Frequency of Mining – The mining process is complicated, and compared to traders, there are fewer miners. Without mining, there would be no cryptocurrency. They cater to the demand for Bitcoin. When the frequency of mining increases, the value of Bitcoin falls because it helps in meeting the demand. It’s crucial when it comes to assessing the value of Bitcoin.
- National and International Rules – Although cryptocurrency is decentralized, many countries have rules regarding it. While countries like El Salvador have actively encouraged their citizens to invest in Bitcoin and set up mining stations, many others, such as Bolivia, have banned crypto altogether. Such differences between nations affect the value of Bitcoin to a great extent as well.
- Performance of other cryptocurrencies – Bitcoin is not the only crypto in the world. There are several other digital coins, and many more will come up in the future. The competition between them is a real thing and can affect the value of each crypto. Bitcoin is still topping the list and is the most in-demand, but this can change. Other cryptos such as Ethereum and Dogecoin are steadily gaining popularity, and this will undoubtedly impact the value of Bitcoin in the near and far away future.
Conclusion
Bitcoin is the oldest cryptocurrency, which is why it has the trust of millions around the globe. Although there is a very slight possibility of Bitcoin’s value going down, there have been fluctuations before that will occur again. So, if you are new to the concept of crypto investment, it is safe to say that you are well aware of the factors that affect the price after reading this. Thus, you can make a wise financial decision and invest in Bitcoin for your future.
