Factors influencing Fluctuations in the price of Bit coin
Jun 03, 2018 Posted / 1942 Views
In the year 2009, the cryptocurrency world was introduced to bitcoins and none has expected that it would grow so popular and will create a unique position. The starting price was about $0.001. there for the next five years, there weren't any events which lead to the fluctuations in their prices.
During the year 2013, it acquires a lot of attention the reason being the Cyprus banking crises. China started to buy the bitcoins in 2013 in enmorous quantities due to which the price was increased to 100%but it didn’t last too long.
On February 2014 due to the DDoS attacks on the server where the exchanges Mt.Gox, which used to control 60 percent of the bitcoin transactions and due to this attack the price of bitcoins fell by 40 percent that year till January 2015.
By the may 2016 bitcoin had gained enough trust of the people as a result more and more people were investing in the bitcoins.
But in 2017 June there was observed a downfall in the market which leads to the decrease in price by 14 percent and now bitcoin is trying hard to get back to the position.
Over the period of time there has been seen fluctuations in the bitcoin market due to various reasons:
• The demand and supply- as we know that the bitcoin is not physically equal to the real world as they work on the exchanges. According to the principle of economics when people buy currencies the prices rise automatically and when there is less selling of the currencies there is a downfall in the prices, so happens to bitcoin. So when chinas demand was more the price was high.
The total number of bitcoins and the bitcoin holders is about 21 million if they are produced on time. In the current time there about 16mln BTC and there are over 14mln existing wallets. There is a continuous rise in the number of bitcoins as the number of bitcoins is fixed and the price will continue to rise.
• Mass media news- the human factor has always been involved in the bitcoins it is basically the way people react to bitcoins. There was a time when it was observed 25 percent fall in the price after the arrest of Ross Ulbricht's.
• Technical issues- bitcoin works on open source technology as it examines everyone source code. The new updates are provided so that it can fix the technical errors and update the weaker points and try to enhance it to observe the price growth. Due to technical problems such as the server attacks and account hacks have reduced the growth of the prices. In 2016 the hackers found the security problem in bit flex which led to the decrease in the price.
• Economic and political factors- this is the era of globalization which is creating a influence in the entire world such as acceptance of bitcoin payments in Japan.
• Volatility- as we know that the bitcoins are extremely volatile in nature as it has uncertainty and involves high risk as the currency is spread over a large area as the security is playing a vital role and it is observed that it is changing drastically.
As we know that bitcoins don’t have a physical backing which means it doesn’t have any international agreements with them. They have all money agreements such as:
• Uniformity- the value of all the bitcoins are equal in terms of value and price.
• Divisibility – they are divided into smaller parts.
• Portability- the individual can transfer money to others in an easy method to other individuals.
• Longevity- the bitcoins exists in a very indefinite system and which will disappear after some time.
• Recognition- it is one of the major cryptocurrencies so it can be distinguished for everyone.
• Security- there are changes in the information and the transactions that are being carried out.
The major difference between the bitcoins and other currencies is that it has advanced features and protocols and with improved systems.
There has been observed some issues in the technical part of the bitcoins which has resulted in the price swings heavily.
In the year 2013 in the month f October and November it announced that the BTC is accepting the payments. Due to which the Chinese had to start the accepting the bitcoins due to which there was seen the rise in its price from $120 to $1150.
As the version updated in 2010 it had established the source of code by which the price increased by 10 times.
As published in the Time magazine in April 2011 the author spoke about the future of the cryptocurrency.
The future of cryptocurrency is very hard to predict as there are the lot of issues related to it which makes it very hard to work on or be believed on as in a short period of time there were rise and fall of their prices.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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