The Bitcoin industry is been influenced by several events. If it’s leaked that the government is not sure about how Bitcoins are regulated—the price will fall. There are various factors that affect bitcoin price. There are many bitcoins accessible, and they’re produced at the predictable rate. So, ownership of the bitcoins is distributed unevenly —certain Bitcoin giants have huge hoards of currency in the storage. This, combined with the liquidity, makes it simple for the people to manipulate this market.
Rules & Regulations on BTC
Due to the speedy increase in the popularity of BTC and various other cryptocurrencies, the regulators are now debating on how to define the digital assets. Whereas the Securities & Exchange Commission classifies digital currency as securities, Commodity Futures Trading classifies BTC as the commodity. Suppose the rules get very stringent and repressive, value of this cryptocurrency drops down. Conversely, if they’re favorable to this crypto industry, they will act as the catalyst for the fast growth.
Users Adoption
Another factor that can affect the Bitcoin price value is adoption of the users on their assets. With the increasing popularity of the currency, it will lead to increasing the prices over the prevailing rate. Besides, when currency demand gets down, it will result in reducing its price. Currently, most of the users are now switching to the Bitcoin currency that works as the best trading currency online. Many individuals, investors and MNCs have started making use of Bitcoin as their mode of making transactions online. Seeing such a wide usage of BTC, it is stated that the prices may fluctuate much higher shortly.
Regulatory Changes
Since Bitcoin & cryptocurrencies are the new concept, it’s tough for the governments to adopt the middle-term place on them. So, governments are changing its regulations concerning bitcoin in terms of the taxation among various others things. Whereas Bitcoin is completely decentralized & independent of such influence of the central governments, regulations decided can have the direct impact on its system as they apply to the investors in the cryptocurrencies. And fears that will arise from the government statements and decisions will cause the Bitcoin price to fall down.
Final Words
When trading Bitcoin, there are many factors responsible in affecting its price value. The investors should analyze the discussed factors before they make any transactions that involve Bitcoin currency. When you are stepping in the cryptocurrency market, knowing these factors will help to raise your profits for a longer term.
