Oct 09, · As trading matures, technical factors will eventually take a backseat in determining bitcoin price. In their place, fundamental factors will start to . Nov 28, · Here are key reasons bitcoin prices are tumbling, and the bullish factors that may buoy them Mark DeCambre 11/28/ California's Covid case surge is alarming. Jun 16, · Bitcoin pricing is influenced by factors such as: the supply of bitcoin and market demand for it, the number of competing cryptocurrencies, and the exchanges it trades on.
Bitcoin market factorsImportant Factors Driving Bitcoin's Drastic Growth In | Seeking Alpha
At last check, Bitcoins changed hands on CoinDesk, down 2. Bitcoin has been a traditionally volatile asset since its inception, but if those observing the closely followed cryptocurrency are looking for reasons for its recent drop, market participants were pointing to at least three key factors:. On Wednesday , Armstrong implied that the U.
Treasury Department my attempt to push through tightened regulation before the Trump administration leaves office. A chart published on Friday by Bespoke Investment Group highlights on key fact that those who are new to bitcoin must get accustomed to: its traditional volatility. Although bears might use this current retreat as a cautionary tale of why bitcoin is a problematic asset, many continue to hold the asset on hope of a more bullish horizon for cryptos.
That said, it might be a feather in the cap of proponents of digital assets at a time when virtual currencies are drawing greater mainstream appeal. In their place, fundamental factors will start to take over: matters such as transaction fees, forks, user adoption, and the general demand for cryptocurrencies. My colleagues at InvestorPlace have a friendly bet: which will reach 40, first: bitcoin or the Dow Jones? And either could be right.
But for , how to invest in bitcoin remains clear. On the date of publication, Tom Yeung did not have either directly or indirectly any positions in the securities mentioned in this article.
Log in. Log out. About Us Our Analysts. So, what drives bitcoin price? Why Bitcoin? Source: Data courtesy of Blockchain Charts. Source: Data courtesy of Yahoo Finance. Sponsored Headlines.
More from InvestorPlace. Subscriber Sign in Username. Sign in. Having trouble logging in? However, what makes this rapid growth interesting is that there are a number of important circumstances that might be paving the way for Bitcoin to sustain its ongoing trend. It is undeniable that the monetary limits of fiat currency are being tested around the world as governments print trillions of dollars for stimulus packages in reaction to Covid The World Resources Institute writes :.
The United States alone has printed trillions of dollars and has far outspent what it has brought in with tax dollars, creating an unprecedented level of debt.
Forbes writes :. This level of spending and money creation has likely driven many investors to Bitcoin, as it may serve as a safe haven as the value of fiat currencies like the US dollar comes into question.
Furthermore, it is uncertain how the stock market, which has been the main beneficiary of quantitative easing, will react when such policies eventually subside. This creates a disconnect between financial markets and the actual productiveness of the economy. Bitcoin may serve as an alternative investment vehicle for those who are wary of an unsustainable securities market.
An article in MarketWatch explains that:. That thinking is also the basis for this resurgence in bitcoin, crypto experts said, as the COVID pandemic forces governments and central banks to spend to limit the economic hit. The monetary policies post kicked off interest in cryptocurrencies and it would not be irrational to assume that the current policies would be encouraging an accelerated timeline for the adoption of Bitcoin. Perhaps the most significant development that may be supporting a potential sustainable growth trend for Bitcoin is the ongoing adoption of cryptocurrencies.
PayPal's decision last month was a further recognition of the legitimacy of digital currencies, crypto enthusiasts say. Perhaps one of the main dangers of cryptocurrencies is the fact that at the moment they are difficult to use and are rarely accepted anywhere.