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Critical drivers of Bitcoin price

By Guardian Nigeria
20 July 2022   |   8:49 pm
Bitcoin has emerged as a fascinating phenomenon in the financial markets. This digital asset does not have any central authority in issuing the currency. As a result, this virtual currency has been controversial ever since its popularity, accompanied by increased public interest. Many things should be known by every trader involved in the trading process, and…

Bitcoin has emerged as a fascinating phenomenon in the financial markets. This digital asset does not have any central authority in issuing the currency. As a result, this virtual currency has been controversial ever since its popularity, accompanied by increased public interest. Many things should be known by every trader involved in the trading process, and they can gather this information through various links like Bitcoin Sprint trading site. 

This virtual asset is also a potential alternative to standard fiat currencies. It has many advantages, such as low or no transaction fees and better transparency. However, a few factors drive the price of this digital currency, including the following. 

Influence of China
China has not been kind with this virtual asset. In fact, in early December 2013, China banned the use of Bitcoins for electronic purchases. For instance, Baidu, an essential player in Chinese online shopping, announced that it was accepting this digital payment in mid-October er 2013, which led to a price increase for this virtual money. However, the ban by China caused a price drop in this digital currency. 

As a result, people believe that the Chinese market is an essential player in digital currencies, especially Bitcoin. Also, although other countries are not against this digital currency, China’s ban gave investors a chance to make the most out of the short but sharp dip.

Demand of Bitcoin
This virtual asset has attracted the attention of retail and institutional investors, increasing the demand for this digital currency due to the increase in media coverage and investing experts and business owners claiming the value this electronic asset has and will always have.

Moreover, this digital currency has become popular in countries with high inflation and devalued currencies, such as Venezuela. Also, it is popular among those who use this digital currency to transfer large sums of money for illicit or illegal activities. As a result, the reduction in the future supply has intertwined with a rise in demand. And this fuels the increase in the price of this digital money. On the other hand, the value of this virtual currency still fluctuates in alternating periods of booms and busts. For instance, a prolonged low succeeded the rise in the prices of this virtual money in 2017, then two sharp increases and downfalls. 

The Media
The media can work for or against the price of this crypto asset. That’s because it informs investors and interested parties. Any changes regarding this virtual currency are quickly published and released to the public. In the end, any good and positive news for Bitcoin investors tends to send the price of this digital money up, and on the other hand, any bad news leads to the price drop of this virtual asset. 

Regulations
Bitcoin’s release was to present an alternative to fiat currencies that also gives people the freedom of handling their money without the interference of intermediaries, especially banks. This unregulated digital currency has gained worldwide popularity and a positive reputation due to its ability to enhance borderless transactions.

Along with that, Bitcoin’s lack of a regulatory body has its advantages and drawbacks. The lack of a regulatory body means that people can use it freely across borders, and it’s not subject to the controls that governments impose on other currencies such as fiat cash. But, governments and interested parties are continuing to push for Bitcoin regulation. The regulatory framework’s development is only a matter of time, and the effects it will have on the price of this digital currency are unknown. 

Conclusion
The combination of the China ban, regulatory developments, and supply and demand is one of the significant factors driving this digital currency’s price.