What major factors affect bitcoin price?
xrates:
I am a total newbie to this forum and don't know very much about crypto currencies.
What are major factors affecting bitcoin (or any other crypto currency) price? Is this mostly supply and demand, do other factors (difficulty of mining, hash rate, etc) play significant role in bitcoins price?
swogerino:
Supply and demand is one factor, but here the bitcoin is not like other currencies, it is not regulated so the supply and demand doesn't impact it that much. Major trading is one of the major factors that determines the bitcoin price. There are other factors too, technological advancement which can only be accessible with bitcoin give bitcoin a huge boost. By technological I mean that you can save your money in your PC and this is a big advancement in technology. This only is reason enough for the price of bitcoin to be up or at least a bit more than gold.
Dudeperfect:
First of all welcome on board, trust me you will learn a lot here. Spend some time in reading the topics, posts and do use that search box from the upper right corner.
Now coming back to your topic, Mining/difficulty etc factors affect the supply and it has nothing to do with the demand directly. The main reason of price fluctuation is the relation and volume of demand and supply. It is directly related to each other so when demand rises the price rises and vice versa. Any news or incident can affect the demand and indirectly the price of Bitcoin (eg - recent fork). Now Bitcoin has grown so big that the movement of traders don't affect the price of it because there are normal users and long term holders which keep the demand intact even if traders are highly selling it.
craZyLovE0916:
Quote from: swogerino on August 17, 2017, 08:40:52 PM
Supply and demand is one factor, but here the bitcoin is not like other currencies, it is not regulated so the supply and demand doesn't impact it that much. Major trading is one of the major factors that determines the bitcoin price. There are other factors too, technological advancement which can only be accessible with bitcoin give bitcoin a huge boost. By technological I mean that you can save your money in your PC and this is a big advancement in technology. This only is reason enough for the price of bitcoin to be up or at least a bit more than gold.
You forgot about the fact that mining difficulty increases over time and this results in the need to get bigger mining rigs and hardware and makes it harder to acquire Bitcoin in general which leads to the price increases like we are seeing today.
xrates:
Quote from: craZyLovE0916 on August 17, 2017, 09:07:28 PM
You forgot about the fact that mining difficulty increases over time and this results in the need to get bigger mining rigs and hardware and makes it harder to acquire Bitcoin in general which leads to the price increases like we are seeing today.
i don't think that increase in cost mining bitcoins is proportionate to increase of bitcoins price.
what really amazes me is the recent volatility of bitcoin, the price is changing plus/minus hundred of dollars within single day.
I think bitcoin market is not that huge (yet), can there be some "shadow market makers" manipulating the price and making huge profits from this crazy volatility?
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