If you are interested in making an investment in cryptocurrency, you will hear a lot of things from others. Of course, you heard about cryptocurrency from someone. But telling a story is a different matter. However, if the other person observes that you are getting interested, he will tell you a lot of different versions.
One of these things is that Bitcoin has a volatile market. Which clearly means that it can go up and down in no time. This is true and it is not just bitcoin but almost every crypto that works on this principle has a volatile market. However, people are still investing in it because it is bringing them profits. You can be careful about certain things and not make mistakes and it will result in amazing profits.
If you want to prevent losses, you need to learn more about how this market works. Apart from the other factors, there is a difference in rates in the international and global markets. This happened on the 24th of Nov last year and jt.org reported it. If you want to learn about it, just go to www.jt.org.
Now let’s talk about the factors that will affect Bitcoin’s market value.
1. Supply and demand
This is one of the basic principles that we find in the market. This is how every market works and the same is the case with Bitcoin. There is a limited number of coins available to mine. Therefore, the price will change with the market demand. If you do not know about the mining of Bitcoin, it works the same as gold.
There is a limited number of coins and you have to mine them. Mining works by solving difficult mathematical problems and getting 1 coin in return. This coin comes after a lot of battery consumption by computers and complex procedures. Therefore, the total cost increases.
As the demand increases, the price also increases. With more mining, the problems become tougher and computers need advanced software programmers and more energy. As a result of all this, the overall price increases.
At first, the mining was simpler and needed the available programs. Furthermore, no one knew about it. Even if people know about something cryptocurrency, they were not willing to invest. However, with time, people made profits and more people got interested in it. Consequently, there was a rise in the demand for coins and more people started mining.
All of this resulted in increasing the price. In the past, you could buy a lot of coins from a single dollar. However, now you need hundreds of dollars to buy just a single coin.
2. Media coverage and social media
One of the biggest influencers of today’s time is the media. Well, social media works the same way. If someone gets interested in something, he or she shares it on their social media profiles. And if they have a public profile and people like them and follow them, they will get influenced too. We have already observed the power of social media.
We have another media, which is e-media, the news channels.
According to the research studies, one of the biggest influencers in terms of crypto was e-media. News channels made reports about how more and more people are buying bitcoins. They told the public how crypto works and how it can benefit you. As a result of such news, the public took it as a way of investment. So they bought more and more coins.
At first, there were entrepreneurs and businessmen who bought these crypto coins. However, because of their interest and use and news channel reports, the public interest also grew.
So to say it simply, media played an important role in making cryptocurrencies look normal among the public. You do not have to pay tax and you do not have to get any permission from anyone. Just give and take things. And it was quite an easy thing to do and it still is.
So if today, the media reports something positive about crypto, we will have a rise in demand. Moreover, the price will also go up. A few months back, Elon Musk tweeted from his official account that you can now buy Tesla with bitcoin. Just after his tweet, the price rise enormously.
However, if the same person tweets something negative about it, the prices will go down. The same media will show the negative news and people will start to take out their invested amount. This will further drop the price.
3. Governmental regulations and legalizations
One of the biggest hurdles was the legalization of crypto. During its initial years, it was not legal anywhere but neither was illegal. There was a lack of regulations. Therefore, it was excessively used by people who wanted to hide their income. You do not want to pay tax, buy bitcoins and invest them or do anything and you are not answerable to anyone.
Although it was easier for the user the lack of regulations is not that simple. In case of any fraud or refund, you cannot do anything about it. Therefore, the public was still hesitant to buy these coins.
However, things do not remain the same always. With time, the opinion changed and more people started investing in bitcoins. To take control over the currency exchange and money flow, governments had to do something.
The eventual result was the legalization of bitcoin and other cryptocurrencies in developed countries. They had better people to make decisions and regulations. So they did it. After the first step by some governments, there were more media reports.
The media showed that this is not that risky if Governments are getting involved.
As a result of this, the demand further increased and also the price. There was a sudden rise.
Similarly, after more acceptance from the Governments, Bitcoin observes a rise in its price. However, if today, any government takes a step against this currency, we will also observe a downfall.