Top 6 Factors Affecting Market Price of Bitcoins

Factors Affecting Market Price of Bitcoins > The price of bitcoin is driven by basic logic: demand rises when many people acquire bitcoins at the same time. The price of bitcoin increases when its demand reaches a specific level, either due to restrictions in some parts or because users don’t want to pay the recent amount. Those who are betting on a price sell their cryptos when the price decreases to protect them from coming losses. Alternatively, you can rely on for all you trading in cryptocurrency. 

It exacerbates the problem as the Bitcoin price continues to fall. Some say that now is the greatest time to purchase bitcoin because the price graph is beginning to rise. The greater the rate of depreciation, the higher the Bitcoin value. Cryptographers have pronounced Bitcoins to be doomed on several occasions. 

Ups and Downs of Bitcoin Market Price- Points To Note

Despite the challenges that bitcoin has experienced, the amount of money invested in the market has dramatically increased. The long-term Bitcoin investors believe the market moves a lot. If this remains the case, the price of Bitcoin will rise certainly.

With a huge market capitalization of $357,597,597,808, the entire market is still in its infancy, whereas the market value of gold is already about $10 trillion. It means that wealthy individuals and businesses can deal on a huge scale and influence the price of bitcoin in a short period, creating opportunities for regular investors.

When a sender enters a quantity and sends the coin, the address to which the BTC is sent is recorded in the network, cryptographically encrypted, and inaccessible to everyone except the owner. The bitcoin network stores the sender’s address as a transaction output, the person you want to send BTC to. 

This transaction output is confirmed by nodes or computers using the network’s computing power. The Bitcoins miners usually solve daunting mathematical challenges in exchange for new bitcoins for each confirmation as an incentive to become nodes in the network.

Top 6 Factors Affecting Market Price of Bitcoins

Bitcoin is the most widely used decentralized digital currency, and its value is influenced by a variety of factors. The most common among the factors affecting market price of bitcoins is the decentralized structure of the digital currency, the bitcoin price is not usually regulated by any organization, group, or government due to the decentralized nature of this currency. Here are some of the factors affecting market price of bitcoins:

  • The law of Supply and demand

The main controller of bitcoin’s price is its supply and demand. Cryptocurrency’s supply and demand are always in play. You’ll understand how it works if you recall the adage “buy low, sell high.

  • Regulation

Because of its decentralized structure, bitcoin was dubbed “the currency of the dark underbelly of the Internet” by the media at first. The economic and regulatory environments in which bitcoin operates significantly impact its price; hence, keeping watch on regulatory developments in every area is worthwhile.

  • Rate of hash

What impact does this have on your digital currency investment? You are more secure if your hash rate is higher. Hackers are less likely to execute hostile operations against the bitcoin blockchain if more processing power is available. The asset gains trust and confidence as the network grows, making it a more appealing digital investment opportunity over time.

  • Volatility can be divided into two categories.

The category of Bitcoin volatility is daily and yearly volatility. Price fluctuations over a period of 24 hours are referred to as “daily volatility.”  Annualized volatility is the price volatility over a year. The daily volatility of Bitcoin is the percentage fluctuation in price from the $1 opening price. 

Bitcoin’s price will return to daily volatility if it reaches $10,000. The vertical area can be seen by looking at the monthly and yearly volatility chart. Bitcoins can buy and trade currency on various platforms. Others save their currency in wallets, while others store them in the cloud.

  • Media exposure is important.

Like how FUD can create pressure, media excitement can create more buying pressure. Bitcoin was in the news every day and gaining popularity among the general public as its price approached $100,000 in 2021.

  • Improved Liquidity

Unlike in the past, when poor liquidity and a tiny market cap caused price fluctuations of up to 50%, bitcoin now has many participants. Legalizing complicated trading products like futures and exchange-traded funds (ETFs) boosts liquidity, eliminates unneeded volatility, and attracts cautious investors who were previously turned off by bitcoin’s price volatility. 


Numerous elements influence the price of Bitcoin. The elements that influence Bitcoin value were discussed in the preceding article.

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