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.