Price of bitcoins going down – here are the Reasons
There is no wonder that bitcoin is now the talk of the town and though bitcoin is a currency, people don’t buy things with it. Instead, they either buy or sell bitcoins just like an investment in different marketplaces or exchanges. Today, more than 100 exchanges exist all around the world where investors trade millions of bitcoins every day!
The value of bitcoin is facing a significant loss over the last few weeks and it got stagnant again. There are different reasons on which the bitcoin price fluctuates and also why the price is going down now. With Bitcoin prices soaring past $20,000 the price have actually increased by 500% since July 2017. Here are four important factors that impact the price of bitcoin which results in the decrease of price.
- Bitcoin supply increasing and demand decreasing
The principle of the price of gold and bitcoin is almost same. Just like the primary cost that influences the cost of gold is mining, the price of bitcoin is also determined by solving certain equations and it is called mining. This is actually the supply part of bitcoin. Then the main part is the demand which is based on trust, popularity and awareness and other factors. So the awareness of bitcoin is less which results in price going down.
- Regulations enforced by governments on the transaction of bitcoin
Bitcoin is not bounded by any particular government regulations. This is because a government actually struggles to lay down any kind of regulation on it. Some countries like USA, Canada, UK, and Japan has already released some regulating laws. Thus due to this, other countries are forced to consider the regulation of cryptocurrency and cryptocurrency exchange. So whenever there is any kind of official statement passed regarding the regulation of cryptocurrency the bitcoin prices fluctuates. Also, different governments have imposed a restriction or ban on the usage of bitcoin which again results in the prices go down.
- Bitcoin in news
The currency value of bitcoin is very volatile and even some minor changes can influence the price of it. There is news about banning of ICO in China and hacking which results in a negative influence of the price of bitcoin. The market capitalization of bitcoin is not that big as the global economy and thus even tiny rumors which circulate of the web holds the capacity of ruining the currency and this is common. Even there is some news that bitcoin is being used for money laundering, selling drugs and various illegal activities.
- Influence of bitcoin users and developers
The users, as well as the developers, also play a very vital role regarding the price of bitcoin. The primary factor that plays a very important role in cryptocurrency environment is trust. Bitcoin is still in its fledgling state and also unstable. There are various issues regarding it and one of them is trust. All these factors make it mutable and risky.
There is a quite diversity in the factors that actually affect the value of bitcoin. In the present scenario, the price of bitcoin is going down but soon due to new technological changes with latest advancements and innovative efforts it will again power up the price of bitcoin.