What affects the price of bitcoin and other cryptocurrencies

[hassancisse]

The prices of cryptocurrencies have been going up and down since it was created and there are so many factors that can make the price fluctuate that way and i will be identifying such factors below:

1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price

2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.

3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.

4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.

5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them

[1714975710]

1714975710

[1714975710]

1714975710

[1714975710]

1714975710

[1714975710]

1714975710

[1714975710]

1714975710

[1714975710]

1714975710

[Mahanton]

All of those factors given above are just common that do really affect crypto market but theres no assurance or proof when it comes to fundamentals
but surely it will always reflect or depend out on that basic supply and demand thing but determining it earlier or knowing the possible movements ahead
then its already an impossible thing for someone to know.As a trader or investor then you should at least consider on using up these infos for your own
benefits or utilizing it on your investment decisions.

[Sanugarid]

To sum this up,

What affects the prices of cryptocurrencies is what affects the people that builds the crypto market. Every people take things differently, one will pull his bitcoin out coz he see a 5% mark down to the price while the other will put more money because of the lower price. One investor will pull his investment out of the coin coz he sees a 20% mar down while the other put some more taking advantage of the lower price. One will withdraw his funds out of a project coz it got involve in a scam while the other will not touch his funds until further news have been reported. I guess what crypto is all about is the people's behavior.

[btc_angela]

You also have to understand that bitcoin is a speculative asset. As such, there could be some we will spread negative news like FUD so it drives the market price to go down. And then when we have exaggerated news, price appreciates and everyone wanted to join the FOMO.

[Twinkledoe]

To sum this up,

What affects the prices of cryptocurrencies is what affects the people that builds the crypto market. Every people take things differently, one will pull his bitcoin out coz he see a 5% mark down to the price while the other will put more money because of the lower price. One investor will pull his investment out of the coin coz he sees a 20% mar down while the other put some more taking advantage of the lower price. One will withdraw his funds out of a project coz it got involve in a scam while the other will not touch his funds until further news have been reported. I guess what crypto is all about is the people's behavior.

As what the OP mentioned, the btc price is affected by those factors. We can't pinpoint only one as the contributor because it is the product of several factors in the market. Even when there is FUD or FOMO, they are just part of the game but they are not exactly the only contributing factor that affect the btc price. So in short, btc price is dictated by several factors and that we can't consider only one factor at a given time.

[TheUltraElite]

This topic has been discussed at length previously but yet it finds its way back here.

The only thing that directly affects the price is demand/supply. If people are buying it more its price will rise. Supply is still fixed, so supply will be the reason why price rise even more in future. It is deflationary after all.

Rest of them all, political news, governments banning stuff - all have an indirect effect through the attitude of the traders. Inorganically created demand to raise price does not stand for long as we all have seen, good example is the 2017Q4 pump.

[Wexnident]

I'd like to think of it actually as only Supply and Demand being the direct factors affecting BTC price, while the rest of the factors affect the demand for it. Ofc, an easy explanation would be every factor possible affects BTC in general, but I'm pretty sure such a notion is pretty wrong. It's like Supply and Demand 100% affects the market, while the rest have a 50/50 chance of actually affecting not the Supply ofc, but rather the demand. This makes it a lot clearer that the rest of the factors except for supply and demand aren't really accurate most of the time, and could actually prove to be opposite of what most actually speculate it to be.

[Finxflo(FXF)]

This topic has been discussed at length previously but yet it finds its way back here.

The only thing that directly affects the price is demand/supply. If people are buying it more its price will rise. Supply is still fixed, so supply will be the reason why price rise even more in future. It is deflationary after all.

Rest of them all, political news, governments banning stuff - all have an indirect effect through the attitude of the traders. Inorganically created demand to raise price does not stand for long as we all have seen, good example is the 2017Q4 pump.

This is absolutely true.The key is understanding what causes the demand,and the level of demand at any particular time, because with Bitcoin, we already know the max supply and can closely estimate the circulating supply.

[kryptqnick]

The prices of cryptocurrencies have been going up and down since it was created and there are so many factors that can make the price fluctuate that way and i will be identifying such factors below:

1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price

2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.

3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.

4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.

5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them

I agree with the first point and with the second one. However, I don't think that the last three are particularly important. #3 won't affect the price much if the country is not among those where Bitcoin is the most used coin or if the media does not give broad coverage of the story. So this can largely be added to point #2. As for the number of users, I don't think it affects the price significantly, not anymore. There are more users now than there were in 2017 (right?), but the price is way lower. And regarding the issues with the technology itself, it might affect the price in the future, but I don't think it affected it yet.

[pakhitheboss]

Frankly speaking the price of Bitcoin and especially the cryptocurrency market at the moment is controlled by Whales. The Marketcap of the cryptocurrency market is not that much at the moment.

If you compare it with the stock market.

It will take time for the market to evolve, still the market is much stable as compared to what it was in 2017 and before. I am not an analyst but it is a simple math if you know the market.

[coolcoinz]

I'd add another point, OP: the stock market. In the last 3 days we've witnessed a significant decline in the price of stocks that was more or less mirrored by Bitcoin and other cryptocurrencies. Last time it happened it was Spring when the pandemic was announced and bitcoin followed the stock market to a short-term bottom.
IMO Bitcoin is not an independent system, even though crypto anarchists would like it to be one.

[jekanmasin]

From what i learn so far i did see the market of bitcoin are so affected the price of altcoins. We all can notice if the price of bitcoin rising all other altcoins will follow it as well. But still it just my own opinion from what i learn. But still i can be wrong.

[Latviand]

Being updated with that is happening around the world can somehow make you knowledgeable about the sudden changes in bitcoin's price and other cryptocurrencies.

Price of bitcoin is easily affected due to the fact that it is volatile in the market.

Some issues can really affect bitcoin due to the connections and factors in the market such as demand about oil, other products, banks and etc. You can't deny that bitcoin is really risky to invest with but if you are courageous to make it grow and you are confident about how you perceive the future of bitcoin and the factors that can affect it, then it is good for you.

[hassancisse]

You also have to understand that bitcoin is a speculative asset. As such, there could be some we will spread negative news like FUD so it drives the market price to go down. And then when we have exaggerated news, price appreciates and everyone wanted to join the FOMO.

Yea I included market speculation it all comprises of what you mentioned as negative news and FUD.

[Cryptoreflector_666]

Being updated with that is happening around the world can somehow make you knowledgeable about the sudden changes in bitcoin's price and other cryptocurrencies.

Price of bitcoin is easily affected due to the fact that it is volatile in the market.

Some issues can really affect bitcoin due to the connections and factors in the market such as demand about oil, other products, banks and etc. You can't deny that bitcoin is really risky to invest with but if you are courageous to make it grow and you are confident about how you perceive the future of bitcoin and the factors that can affect it, then it is good for you.

To predict the (relative) price of bitcoin in the future, it is necessary to understand how political and man-made disasters affect the financial market. If a major disaster occurs in Japan, it becomes clear that the price of the yen will begin to fall relative to the dollar, so the dollar will begin to strengthen and grow, And the higher the dollar is higher and bitcoin.

[TheUltraElite]

IMO Bitcoin is not an independent system, even though crypto anarchists would like it to be one.

Crypto-anarchists are weed-fed people with a load of bullcrap in place of brains who dont understand the E in Economics. They fail to realize how this world works and hopes to get out of the system and thinks bitcoin to be their saviour while it is not completely correct. Moreover, those who claim to be such are nothing but bagholders who are panicking to sell because they think bitcoin will not be giving them the profit them thought of.

In short, crypto is not something that is is going to change the world overnight. It might change the economy gradually but it will take years. The sane and more logical way of proceeding with it is buying some bitcoin when prices become low. Do not go all in because that is a stubborn move to make. Wait for price to floor and buy it. But keep in mind that the future of bitcoin though bright can become dark anytime.

[pooya87]

everything after number 1 can be categorized as factors affecting demand (aka as a subcategory of #1 supply and demand). specifically #4 which is literary the meaning of demand!

additionally since you are generalizing it to "other cryptocurrencies" then you should factor in the most important thing that affects the price of altcoins which is pump and dumps. without them 90% of altcoins wouldn't exist and they wouldn't have anything else to offer since their entire purpose was to give profit to those who can ride the pump and dump hype.

[Alert31]

 Affecting the price of bitcoin and other cryptocurrency is all because of demand and supply together with the decision of every people using it to buy and sell. I don't think if there is other factor that make it's price go up and down except people exchange buying and selling.Those other factor you mention is just affecting the peoples decision or the demand.

[teosanru]

The prices of cryptocurrencies have been going up and down since it was created and there are so many factors that can make the price fluctuate that way and i will be identifying such factors below:

1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price

2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.

3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.

4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.

5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them

I think this is a wrong way to interpret. The reason for market movement has always been demand and supply and nothing else. All these factors that you have mentioned except demand supply are nothing but just factors that affect the demand and supply in some way. So Economically speaking the equilibrium ends up at the point where demand and supply gets exhausted.
Speaking of it financially it's really pretty hard to get an intrinsic value of bitcoin so finding a rough value using finance is almost impossible. Finance generally counts the PV of future cash flows for intrinsic values.

[k@suy]

The prices of cryptocurrencies have been going up and down since it was created and there are so many factors that can make the price fluctuate that way and i will be identifying such factors below:

1. Supply and demand: The higher the demand the higher the price. If theres an high demand for bitcoin and other cryptocurrencies you will definitely see and increase in them. We all know that the total supply of bitcoin is just 21,000,000. This makes bitcoin very scarce and it will definitely see an increase in price following the rule of the lower the supply the higher the price

2. Market speculation: Speculation provides the market with liquidity and the aim of this speculators is to make profit. So many people see cryptocurrency as a speculative tool because its easy to create fear in people about a coin and so many people will FOMO in.

3. Regulatory and Government issues: The government of every country are always finding a way to regulate all cryptocurrencies which is not possible. The fact that they dont like the decentralized nature of it. Cryptocurrency is definitely not accepted in every country in countries where it is accepted and probably the decide to regulate and ban later. This can affect the price of cryptocurrencies badly.

4. Community size: The scale of the group is what significantly impacts the Bitcoin price or every other crypto. A wide group is signalling that there is strong interest for this coin. Many businesses and individuals use it, and that broad adoption encourages more growth.

5. Ecosystem development: Many cryptos have their issues even the head of it all Bitcoin. Presently scalability is the main challenge of bitcoin, This means the network is unable to deal with the rising amount of transfers that users submit. Many cryptos have their issues too and these issues can cause a decrease in the price of them

I think this is a wrong way to interpret. The reason for market movement has always been demand and supply and nothing else. All these factors that you have mentioned except demand supply are nothing but just factors that affect the demand and supply in some way. So Economically speaking the equilibrium ends up at the point where demand and supply gets exhausted.
Speaking of it financially it's really pretty hard to get an intrinsic value of bitcoin so finding a rough value using finance is almost impossible. Finance generally counts the PV of future cash flows for intrinsic values.

I think the major reason behind the volatily of crypto currencies are the demand of the users. For example of this month has the lowest demand of the users then the next will be affected. The higher the demand the higher that the crypto currency's value will rise. That's why the value of crypto are not consistent because sometimes it goes down and sometimes it goes down.