Have you ever rode the Kingda Ka at Six Flags Great Adventure?
If you have, you might understand how it feels to HODL Bitcoin.
Just recently in one-month Bitcoin’s price rose over 10,000 dollars
only to fall more than 10,000 dollars the following month.
A twitter-verse full of financial advisors all have their theories but we here at Cointelegraph felt it was time for a more clinical approach.
So, what exactly are the factors that influence Bitcoin’s price?
Demand and Supply: This factor is major.
Nowadays, Bitcoin does not have any physical equivalent in the real world, so BTC are sold on exchanges.
The main principle of economics says that if people buy a currency, its price rises and if people sell the currency, its price falls.
Bitcoin is no exception.
That is how we find ourself in the world of bulls and bears and whales, oh my!
The total amount of Bitcoin Holders: The total amount of Bitcoins is 21 mln, but they are produced with time.
Currently, there are about 17 mln BTC and more than 14 mln people have wallets with BTC.
This number is growing rapidly and since the number of Bitcoins is fixed, the price will continue to rise.
News and Mass Media: There’s always a human factor involved – i.e. the way people can react to the news.
This type of news has been dubbed FUD by the cryptocurrency community which means ‘fear uncertainty and doubt.’
When FUD hits, the price of Bitcoin inevitably takes a hit as well as was seen this past January when news of Korean regulation hit the papers.
Regulation: In the age of globalization, decisions in just one country can have an influence on the entire world – i.e. accepting Bitcoin as a means of payment in Japan.
The greatest problem with predicting Bitcoin’s price is that the factors which influence it are hard to predict.
Because of this, we recommend that instead of trying to predict the whims of the world in the future, look backwards.
Look at the financial crisis of 2008, look at governments who keep a stranglehold on the poor and the hyperinflation that impacts countries all over the world.
Look at the way money has been handled, manipulated and abused over the past 100 years.
If you do that, you’ll stop worrying about Bitcoin’s price and start being hopeful for how it will change the world.