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How is the Price of Bitcoin Determined?


One
 of the most important issues that are wondered about Bitcoin is how the price of crypto
money
 , which is not connected to any center, is determined. The biggest difference between Bitcoin and fiat currencies is that it is not valued by a center or legally declared. Bitcoin’s price varies in line with the supply and demand in crypto money exchanges and varies due to supply-demand differences in each exchange. It is the demands of investors in line with their expectations that determine the price. In short, if the purchase demand is high, the price increases, and if the sales demand is high, the price decreases.

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Why Does the Bitcoin Price Increase?
 

The increase in demand in Bitcoin triggers an increase in its price. The main reasons for the increase in demand are:
 

  • The supply of Bitcoin is limited to 21 million, which has a significant impact on the price of Bitcoin. There are currently more than 17 million Bitcoins in circulation in the market, with the remaining supply expected to be released by miners over 120 years. The fact that Bitcoin’s popularity continues to rise during the completion of the supply will allow the demand to increase and the price to rise due to the limited supply. 

  • Technological developments, increasing in terms of security, increasing anonymity will increase the use of Bitcoin and positively affect its price.

  • In the early days of Bitcoin’s market, governments expressed negative ideas about crypto coins, but now governments have taken their ideas in a positive direction by doing crypto money studies before central banks, in this case, it will contribute to the increase in demand by increasing the awareness and reliability of Bitcoin. 

  • Another development that has led to an increase in demand for Bitcoin is that companies are beginning to accept payments as cryptocurrencies, which will make Bitcoin attractive and consolidated as a means of payment. 

  • It can be shown as the prominence of Bitcoin as an investment tool through reliable exchanges such as ICRYPEX. 
     

Why Does Bitcoin Fall?
 

  Bitcoin, with its decrease in demand, triggers a decrease in its price. The main reasons for the decrease in demand are:
 

  • Governments banning or restricting cryptocurrencies. For example, the U.S. government’s ban on the activities of Bitcoin may cause investors all over the world to withdraw and demand to fall, negatively affecting the price of bitcoin.

  • Major media outlets around the world have damaged Bitcoin’s image by spreading negative news, which has led to investors questioning their confidence in Bitcoin and causing demand to fall

  • There are more than 5 thousand crypto money assets in the world. This excess in the number of crypto coins may cause it to reduce interest in Bitcoin.

  • Bitcoin’s loss of demand as a result of being exposed to technological errors, ecosystem failures, unfavorable regulations by its developers 

  • A large amount can also be shown as negative manipulation by investors holding Bitcoin.

 

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