Back in 2008, Bitcoin sparked a revolution in the global financial industry. This revolution managed to change to way we look at payment methods as well as investing to make a profit. Bitcoin is a digital asset that is fully optimized for online use. Considering the fact that it is a cryptocurrency, it does not have a physical form.
After it rose to power, Bitcoin managed to break all types of records when it comes to its value. Currently, this cryptocurrency is valued at around $40,000 and experts even believe that it can rise to $100,000 by the end of 2021. That is a huge price spike.
The value of Bitcoin is exactly the topic that we wanted to discuss in this article. As you may know, many factors influence its price and are going to name a few of them. Not only that, but we’ll also explain how they manage to influence the price of this cryptocurrency. Let’s start.
Supply and Demand
As with any product on the market, the main factor that influences Bitcoin’s price is supply and demand. If the supply is higher than the demand, then the price of a product/service will be lower. But, if it’s the other way around, then the price will be much higher.
The second scenario describes Bitcoin perfectly. Bitcoin is a finite product as the number of units is limited to 21 million. Not only that, but it is extremely hard to generate Bitcoins into the network. Miners are responsible for releasing new Bitcoins in the network and it takes a lot of time for them to do that.
Since Bitcoin is hard to earn and the demand is high, it is logical for it to be extremely valuable. And if you are wondering where do people check the latest Bitcoin prices and buy/sell this cryptocurrency, the answer is trading sites. Reputable platforms such as Bitcoin Profit will allow you to gain access to all of their services once you register. The process of registration is fast and simple.
Interest from Companies
Many companies saw the potential that Bitcoin has and acknowledged the fact that this cryptocurrency has a plethora of advantages over regular payment methods. That is why they decided to integrate it with their system and accept payments with this digital currency.
Even global brands such as Expedia, Microsoft, and Starbucks are collaborating with Bitcoin. The massive institutional interest is also one of the factors that influence Bitcoin’s price as it brings stability to the network by increasing traffic. And in the crypto world, the more stable a digital asset is; the more valuable it is.
As you may know, Bitcoin is not the only cryptocurrency on the market. Yes, it started the whole movement, but thanks to Bitcoin’s impact, there are now hundreds of cryptocurrencies on the market. So, competition plays a vital role in the price.
But, while many would think that the higher the competition is, the smaller the price will be, that is not the case with Bitcoin. Because Bitcoin is superior to other cryptocurrencies, a majority of the crypto users only trade with Bitcoin, which drives its stocks up and increases its value. It is reported that there are around 5 million Bitcoin users, which is more than 80% of the crypto world.
As supply and demand is the main factor that influences the price of Bitcoin, it is worth noting that 99% of all Bitcoins will be mined by 2032. That is why experts predict that Bitcoin will continue to rise in value in the next couple of years. Some early predictions state that it can reach as much as $1 million in the next 5 years.