The Different factors that can Affect Bitcoin Price

25/09/2013 15:06

The trading of bitcoin is one thing that has been popular recently, specifically among people who are looking for contemporary currencies that can be traded. While there are many people who are hopeful about the bright future of this trading activity, there are also some who are skeptic. This is evident from the fact that governments of different countries are showing their efforts to regulate this currency. To succeed in trading, you need to have the ability to predict the trend when it comes to bitcoin price. In this case, the rest of this article can prove to be a lot of help.

One of the factors that can be examined as a reason for the increase in the value of bitcoin is the crisis that has transpired in the European region, specifically in the case of Cyprus. This is one of the reasons on why there are people who seemed to have lost their faith with their central currency, and hence, turned into bitcoin. The major implication is that the price has skyrocketed. Any other similar crisis in the future can be reflective of the rise of bitcoin price.

More so, another factor that can be influential of the rise in the price of bitcoin is the fact that the market is stills small but the interest is already huge. Some people might think that bitcoin is a joke. However, when one fully understands how the entire process works, it will be easier to be motivated to be involved in trading. As the market balloons, including the fact that people are hoarding bitcoins, a negative effect can be noted, but there is no certainty on such.

Government acknowledgement is also a factor that is critical in having a positive influence in the price of this currency. It is recognized in Germany and is being taxed in Canada. In other countries, different government authorities are in search for ways by which it can be regulated, which will be beneficial for increasing the confidence of people who are interested in its trading. Such acknowledgement from the government can prove its attractiveness.

On the other hand, it is also important to highlight the role of mainstream media. Because of the hype in the news, many people have decided to buy bitcoins, even in the absence of prior comprehensive knowledge on how such works. This has resulted into unfavorable results in trading, and hence, people have lost their confidence with regards to this digital currency. In the future, the media can also threaten the price of bitcoin and bring its price down, especially with the calls being made for the regulation of such.

While the media frenzy can have a negative impact on bitcoin price, such is actually a double-edged sword. With the increasing attention that is given into this form of trading, there are also many articles and news about how bitcoin can actually work, and hence, being able to attract more and more people to see how it