How Does Bitcoin Price Fall and Rise?
Koinal.io offers Bitcoin in ways like buying stocks and bonds. We provide convenient accounts for Bitcoin and other cryptocurrencies and simplify the process through bank debit and credit card purchases.
Many Price Factors
The stock market as a whole rises and falls on investors’ demand. Just as with stocks, demand directly affects the price of Bitcoin. Demand is the dominant factor, and the widely-accepted influences on demand include news, events, information, political changes, social issues, and overall economic conditions.
The amount of Bitcoin that can be mined or produced is limited to an overall cap. The supply of Bitcoin in the marketplace at any time also influences the price. For example, typically, a massive sell-off will depress prices as there may be more items than buyers.
News and Events
Like traditional markets, Bitcoin prices can respond to news and events. Buyers may be motivated or more guarded by sudden event and impactful news. For example, the emergence of increased regulation can affect the willingness to buy Bitcoin. One should note, there might be a similar impact by the emergence of regulation on the high tech sector; buyers may be more guarded when considering these stocks.
- Adoption- Major retailers and institutional investors can raise Bitcoin’s price when they agree to participate or accept it. It includes stocks and other stock market type securities like ETFs.
- Supply- Bitcoin has a maximum cap of 21 Million coins. When reached, there will be no more new coins. The fixed supply makes Bitcoin more reliable than currencies that expand rapidly to achieve government goals.
- Small Volume- Bitcoin has a small volume relative to national currencies. Events can have a magnified effect because they impact a smaller volume than stocks, bonds, or other currencies.
Impact of Coronavirus Pandemic
News and events related to the coronavirus offer good examples of the impact on Bitcoin prices. The pandemic caused severe economic dislocations as economies shut down the gradually reopened. Governments made monetary policy moves to reduce the financial injuries to their business owners and citizens. The result may be the widespread use of economic policies to increase the money supply. The increase in the money supply may weaken the values of fiat currency relative to Bitcoin. The pandemic response may spur buyers to buy and hold Bitcoin rather than cash.
At Koinal, we offer an efficient and convenient method for purchasing Bitcoin and other currencies. Our secure portal uses bank-issued debit cards and credit cards to buy cryptocurrencies. Open an account today and begin or expand your crypto holdings.