Bitcoin became the very first crypto-currency whose value is influenced by a variety of factors. In normal occurrences, the price of bitcoin is expressed as the exchange rate of the bitcoin about other currencies. With the rise of adoption and the use of this currency, its demand has been on constant rise unlike during its early years. The value of this crypto-currency is not controlled by the government or any other institution owing to its decentralized nature. Therefore, to understand forces which influence the price of the latter to be able to predict the future trend of bitcoin. Here are some factors affecting the bitcoin price.
The price of this crypto-currency is normally affected in the event where the government releases a statement about digital currencies. This impact is still felt even on occasions where the government deploys actions which are not related directly to bitcoin. As long as any restriction has been put on crypto-currency, the price of bitcoin can change dramatically. Nevertheless, the anonymity of bitcoin has in one way or another make it somehow proof to these regulations. This is why the governments are working towards eliminating its anonymity.
Media factor is another element that has great influence on the value or price of bitcoin. Negative news from the media influences the price negatively, while media hype has a positive influence on the price of bitcoin. An example of this is how news about hacks or frauds within the bitcoin platforms causes disruption and panic within the bitcoin community. In turn, this leads to drop in price. An impact of a similar magnitude is felt in the event where the government gets involved in this business to a point where they instill regulations. This force affects bitcoin traders and the value of bitcoin too.
Technological changes and innovations
Even though this factor has never been experienced before, the chances are that technological improvements and innovations will affect bitcoin price. An example is how awareness and interests have stimulated people within the bitcoin community after the PayPal system was integrated. This payment system was purposefully developed and incorporated into to the crypto-currency systems to come up with an easy-to-use payment system.
Apart from the above, there are a whole lot more factors that affect bitcoin price. Some of the above factors have a gradual impact on its value while others have an instant impact. Despite these factors, the price of bitcoin has been on the constant rise over the past few years.