In between 2017 and 2018, for the first time, bitcoin’s value experiences an unstable time because the price of bitcoin fluctuated significantly. Since bitcoin’s invention, there have been many controversies regarding bitcoin’s negative factors, but still, people considered it a valuable asset. If we consider the bitcoin in the long-term, it will gain popularity because of its limited supply. Some ultimate benefits of the bitcoin market attract users. The only major disadvantage of the bitcoin market is its market that fluctuates a lot. You can trade bitcoin by using https://bitcoins-union.com and can download the best software online.
Despite the advantages and disadvantages of bitcoin, the main factor is that users see the bitcoin network as worthy and consider investing and trading in it. Various factors affect bitcoin’s price, and if you are a beginner who wants to get into the bitcoin market, it is imperative to understand the bitcoin market. Investors and traders must keep themselves updated about the bitcoin market and learn the factors that affect bitcoin’s value. Let’s learn about some of those factors:
Bitcoin reward halving
The miners do the work of mining new bitcoins, and for the hard work and efforts, they are rewarded with bitcoins. There is a set of protocols that are set for bitcoin rewards. This factor contributes a lot to the price of bitcoin. The bitcoin network’s main thing is that the supply of bitcoin is limited, and there are only 21 million bitcoins. Bitcoin is different from fiat currencies because central authorities inflate fiat currencies, and bitcoin is a computer code with a fixed supply.
The bitcoin reward is set to get halved after every four years, and since bitcoin’s invention, the block reward has now halved to 6.25 BTC. This happens after every four years. Bitcoin reward halving is the factor that has a great impact on the mining industry. Throughout 2017, bitcoin’s price was at its peak, and in the following year, 2018, the price of bitcoin fell, and this was the year when many miners left the mining practices, and mining pools were shut down.
User adoption
Another main factor that has a great influence on the price of bitcoin is its user adoption. The number of people accepting the currency drives bitcoin’s price, and because the supply of bitcoin is limited, the price completely depends on its demand. For instance, if the demand for bitcoin is low, then its value will decrease. Not only individuals but also investors, multinational corporations, and even governments have started adopting bitcoin for trading and investment purposes. This is big evidence that states that bitcoin has reached a new level.
In 2009, bitcoin’s price was nearly negligible, and people weren’t impressed with bitcoin’s invention. Still, in 2018, bitcoin’s price raised and attained a level that people were attracted towards investing in bitcoin. During the years 2012 and 2015, bitcoin’s price fluctuated a lot. It became affordable for people to invest in bitcoin, and the difficulty level of mining decreased, and in 2017, it again increased. In 2017, bitcoin’s price reached its peak, and at that time, the mining difficulty increased, and bitcoin has made tremendous growth.
Cryptocurrency regulations
Another factor that affects the price of bitcoin was cryptocurrency regulations. The invention of bitcoin has attracted people to the world of cryptocurrencies, and this industry has experienced a great acceleration. Now, the regulatory bodies and media were attracted to the cryptocurrency industry. The government didn’t like the concept of cryptocurrencies because it didn’t involve government and financial institutions. Therefore government started to link criminal activities, money laundering, and terrorism financing with bitcoin.
As of 2020, many developing countries have legalized bitcoin and other cryptocurrencies, and nearly there were not any restrictions. Around 67% of the countries considered bitcoin a legal currency, whereas only 8% of countries consider bitcoin illegal.
Future of Bitcoin
Many factors drive bitcoin’s price, but it is nearly impossible to say about the future of cryptocurrencies. The future of bitcoin is uncertain, and it is difficult to say whether it will replace fiat currencies in the future or not. The only best thing about the bitcoin network is that it has created many opportunities for individuals.
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