Factors Influencing Bitcoin Price

November 28, 2017

By Mary Ann Callahan

Playing on the crypto market has proven to be a roller coaster ride. With hard forks, bad publicity and talks about a bubble from critics, it is no wonder the price of cryptos including Bitcoin goes up and down. The cryptocurrency world is unpredictable, which gives all the more reason for jumping onto the bandwagon. Trading and investing in cryptocurrencies can be extremely profitable if you know the ins and outs of the industry.

We explore the factors that influence the Bitcoin price so that you can be ahead of the game at all times.

Moves from Institutional Investors

Every day there are more financial institutions and investment companies offering clients the option of investing in Bitcoin. This has a big influence on the price of this cryptocurrency as investors get more familiar with this form of investment. Where do things stand today?

Recently, the BTC price has skyrocketed and now equals $8,200. One of the first people to predict that mark was Goldman Sachs who is actively considering the introduction of Bitcoin trading. Another financial giant, JP Morgan, is also showing a strong interest in the first-ever cryptocurrency and is well on the way to offering Bitcoin futures to their clients. As for the European market, it has joined the party by designing innovative products based on cryptocurrencies and blockchain technology.

There are even more financial influencers in line to jump onto the Bitcoin bandwagon, which is bound to be reflected in the value of cryptocurrency. Even the Bank of America agrees and says this increase in the number of investors can affect the price of currencies considerably.

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Interest from the Asian market

Having the largest population in the world, Asia has a substantial influence on the price of Bitcoin due to the masses that show interest in the product. In the past, the moves from China and South Korea really upset the markets by making nerve-shattering announcements like the ones about banning Initial Coin Offerings (ICOs) and Bitcoin itself in China.

Regardless, this has not stopped the Asian market from continuing to invest in cryptocurrencies like Bitcoin. It is interesting to note that since news about South Korea regulating Bitcoin broke, the demand for cryptos has grown even more in these countries. Japan is also a driving force behind the price of Bitcoin in this regard.

Growing demand

Supply and demand definitely have an effect on the price of Bitcoin. Cryptos are still a new concept to majority of the world, and the demand for Bitcoin will increase as more people become familiar with it.

To a large extent, the mining community plays a significant role in establishing the demand for Bitcoin. As more Bitcoin is mined, its value may decrease. Sticking to mining with the cheaper price of solar power or renewable energy in comparison to energy from a supplier may give the mining sector a significant boost.

Something really interesting is that the demand for Bitcoin or other crypto coins also increases when they appear stolen by hackers from a wallet. In recent news, 110 Bitcoin was stolen from a YouTuber, and the price suddenly increased.

Have you heard the latest news?

It is a fact that about 1% of the world know what cryptocurrencies and Bitcoin are. This is something that early investors can use to their advantage. Investing early in cryptos, particularly in Bitcoin, will give these investors the competitive edge as they would be years ahead with building their portfolios. This leaves a lot of room for new investors to learn about the benefits of cryptos and how one can take advantage of the investment opportunity.

News is one of the biggest contributors to whether Bitcoin’s price will increase or decrease. Since the idea behind cryptos and their potential are still widely regarded as unconventional, the industry tends to get a lot of bad publicity. This can easily scare off amateur investors as they fear for the security of their investment.

On the other hand, good news of a new record price or a big retailer accepting Bitcoin as a method of payment can make the price of Bitcoin go through the roof. Clients will hear the news and start asking the revolutionary question – What is Bitcoin? And the rest is history.

It is clear that as more people invest, the price will increase. One must remember that there is no such thing as bad publicity. The more Bitcoin is being reported on by the leading news outlets, the more popular it will become, and this will affect the price in the long run.

Altcoin – the new kid on the block (chain)

The general rule of thumb is that when the price of Bitcoin increases, the price of alternative coins or altcoins will drop, and vice versa. There are hundreds of altcoins available, and it has become very easy for almost anyone to create an altcoin.

Altcoins hold their value in their blockchain technology that aims at improving features of Bitcoin. The biggest challenge altcoins face is being pumped and dumped. This is when investors force the price to go up and down and then to buy and sell at strategic points to make more money. This can cause serious damage to an altcoin, so the majority of financial investors recommend buying the altcoins that will be most profitable over the long term.

Possibility of free fork money

Nothing makes the price of Bitcoin soar like the prospect of receiving free money during a hard fork. 2017 can testify to this as two hard forks took place, which caused the price of Bitcoin to fly through the roof as investors were dumping altcoins to have more Bitcoin.

The holders of Bitcoin at a specific time around the fork were rewarded free fork money, namely Bitcoin Cash and Bitcoin Gold. Hard forks can be extremely profitable if you play your cards right.

Despite the fact that the crypto industry has yet to be stable, the number of Bitcoin enthusiasts keeps rising, because investing in Bitcoin has never been easier than it is now. Every year the cryptocurrency arena is entered by new Bitcoin exchanges and brokers. The leading brands like CEX.IO are now trusted by millions to buy and sell Bitcoin on a daily basis, because they offer customers the best and most secure online service. Buying Bitcoin is simple – all you need is just do a bank transfer or pay with your credit card to become a part of the cryptocurrency elite.


About the Author: Mary Ann Callahan

As an expert on Bitcoin-related topics, I’ve found myself as a Journalist at Cex.io – cryptocurrency exchange. I’m working on articles related to blockchain security, bitcoin purchase guides or bitcoin regulations in different countries.