Want to understand.....

[shoemanpete]

Hi, why is the bitcoin price increase or decrease seemingly attributed to economic issues of the day?  A recent headline said Biden's trillion dollar package caused the price to hit 60k+.  Surely bitcoin is purely based on supply and demand isn't it? 
Thanks.

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[ranochigo]

Yes but the demands could've been caused by an external factor as well; take for example Dogecoin which rocketed after Elon Musk tweeted about it and Bitcoin when Tesla bought into it as well. These would influence the demand and probably cause more people to buy/sell it which would then result in a new equilibrium formed with the supply/demand curve.

[BIT-BENDER]

Hi, why is the bitcoin price increase or decrease seemingly attributed to economic issues of the day?  A recent headline said Biden's trillion dollar package caused the price to hit 60k+.  Surely bitcoin is purely based on supply and demand isn't it? 
Thanks.

Even if the news influence/instigates what the price of crypto-currency will do, it has to do it this way, disclaimer, -am not in the saying that Elon musk or any influencers on social media influence the price, nor any government-, so if any influence affect bitcoin/crypto-currency price, it has to go through demand and supply, for explanation if the influence is attractive then the demand goes up, then affects the price and vise versa.

[mk4]

I mean, it is, though?

For example, let's assume that why bitcoin hit 60k was 100% proven because of the recent stimulus package. Supply and demand in this case still takes to effect, because we can assume that the market demand for bitcoin increased because people suddenly have more money to spend(because of the stimulus money) and buy bitcoin.

[Swappa.io]

I mean, it is, though?

For example, let's assume that why bitcoin hit 60k was 100% proven because of the recent stimulus package. Supply and demand in this case still takes to effect, because we can assume that the market demand for bitcoin increased because people suddenly have more money to spend(because of the stimulus money) and buy bitcoin.

This.

Also, Bitcoin's market cap is currently north of $1 trillion (current price * circulating supply). At this level, there is without any doubt that institutions are backing Bitcoin. For example, Elon Musk disclosed Tesla bought 1.5 billion in Bitcoin back in January. When institutions are involved, price manipulation is thrown into the mix. If a company has enough capital, it is possible to raise and lower the price of Bitcoin to shake retail investors (people like you and me) into selling their coin. Then, that institution will buy your coin at the discount you just provided them.

Buy and hodl.

Even if the news influence/instigates what the price of crypto-currency will do, it has to do it this way, disclaimer, -am not in the saying that Elon musk or any influencers on social media influence the price, nor any government-, so if any influence affect bitcoin/crypto-currency price, it has to go through demand and supply, for explanation if the influence is attractive then the demand goes up, then affects the price and vise versa.

I disagree here. How does Elon Musk / certain governments not directly influence the price? Elon sent some tweets out about Doge and propelled it into an entirely new price bracket shredding old all-time-highs before bitcoin was north of 50k.

[Fatunad]

Hi, why is the bitcoin price increase or decrease seemingly attributed to economic issues of the day?  A recent headline said Biden's trillion dollar package caused the price to hit 60k+.  Surely bitcoin is purely based on supply and demand isn't it? 
Thanks.

It is indeed depending on supply and demand but we cant really cross out those external events that do happen in the economy neither it is connected with finances or with some
adoption news then it can really make out some significant effects thats why anytime there's a news then some of people do really take it seriously and do apply it into their
analysis aside from those technicals that they had made.This is one of the things should be watched out because not all would really be making some
effects to the market.

[shoemanpete]

Thanks for explaining. I do get the fact that the trading by the big players affects the price.  But still don't get how Govt actions unrelated to BTC affect it.  The comment that people suddenly have money etc........nobody has been given it yet, and the likes of us mortals won't be given enough to fritter it away!

[BIT-BENDER]

I disagree here. How does Elon Musk / certain governments not directly influence the price? Elon sent some tweets out about Doge and propelled it into an entirely new price bracket shredding old all-time-highs before bitcoin was north of 50k.

I don't know about doge or alt-coin, I don't follow any of them for now, but for bitcoin, Elon musk or any other influencers can't take glory of bitcoin passing 40k or 50k US dollars, he might have attribute to publicity or strengthen people to want to buy, but this is one part of many parts, people would still do there research before they buy

[mk4]

Thanks for explaining. I do get the fact that the trading by the big players affects the price.  But still don't get how Govt actions unrelated to BTC affect it.  The comment that people suddenly have money etc........nobody has been given it yet, and the likes of us mortals won't be given enough to fritter it away!

Yes, it's coming in March 17th. If we're going with the bitcoin-rises-because-of-stimulus theory, we could say that people are making assumptions that bitcoin's price will rise after the stimulus checks are distributed, because in the past, bitcoin rose in price after the past stimulus checks were distributed(whether if this is actually what caused the rise or not). And with that, since people are making assumptions, we could say that the demand for bitcoin rises.

[fiulpro]

Hi, why is the bitcoin price increase or decrease seemingly attributed to economic issues of the day?  A recent headline said Biden's trillion dollar package caused the price to hit 60k+.  Surely bitcoin is purely based on supply and demand isn't it? 
Thanks.

Most people getting the stimulus , they do not need it , now what will they do with extra money ?
Invest in stocks ? But the market is falling .
Invest in gold ? But it's over priced right now.
Invest in property? But it's extremely expensive.
How about investing in an asset which was already bullish 3-4 times this year , returns are instant and you do have every control of it. So people decided to invest in Bitcoin and at the end of the day it has been the most amazing investment for most people.
- whenever you see a lot of Investments pouring in , it does mean that there is scope of the price increasing.
It is the demand and supply rule only! More people now want to invest in Bitcoin for the price but at the same time they have to understand that the supply is limited thus causing the Increase in the overall price.

[bassbity]

In simple terms it is related to the decline and increase in bitcoin based on supply and demand. it as a whole, but if it is described in detail, it will contain several institutions, companies that have funds in bitcoin. without realizing the government will be the same, only they do not publish it directly in order to protect its name and reputation within the scope of the government. We cannot deny that the economy has experienced ups and downs in correlation with bitcoin. the reason is, bitcoin can make the economic system skyrocket when various institutions make requests in the form of bitcoin.
Then in the context of Biden it is not much different, there is a link between Biden and the economic growth caused by Bitcoin.

[Swappa.io]

I disagree here. How does Elon Musk / certain governments not directly influence the price? Elon sent some tweets out about Doge and propelled it into an entirely new price bracket shredding old all-time-highs before bitcoin was north of 50k.

I don't know about doge or alt-coin, I don't follow any of them for now, but for bitcoin, Elon musk or any other influencers can't take glory of bitcoin passing 40k or 50k US dollars, he might have attribute to publicity or strengthen people to want to buy, but this is one part of many parts, people would still do there research before they buy

Yes, people do their research. Not everyone though. That's for sure. Some people will also jump on a bandwagon instantly if they think they are hopping on quickly enough. Look at the AMC / GME stock craze. Not everyone did research there. People swarmed because they thought they could ride [what came to be] an extremely volatile wave. A lot of people lost big. There was absolute price manipulation by institutions because they were about to lose at their own game.

Tesla buying over 1% of the total BTC supply surely did something to price. It gives Bitcoin a bullish outlook, and that alone is enough "research" for many people (myself included) to buy. If anyone is dropping $1.5 bil USD into anything, it's for a good reason. Money talks.

[Stalker22]

Thanks for explaining. I do get the fact that the trading by the big players affects the price.  But still don't get how Govt actions unrelated to BTC affect it.  The comment that people suddenly have money etc........nobody has been given it yet, and the likes of us mortals won't be given enough to fritter it away!

Some institutional investors are probably speculating that because of this stimulus, the dollar value will fall on the global currency market. You understand that the value of the dollar is also determined by the law of supply and demand. So, if the supply increases significantly, the value must go down.
Right now, we're getting some evidence of this dollar selling.

[BlackHatCoiner]

Hi, why is the bitcoin price increase or decrease seemingly attributed to economic issues of the day?  A recent headline said Biden's trillion dollar package caused the price to hit 60k+.  Surely bitcoin is purely based on supply and demand isn't it?

As long as they keep printing more dollars, the price will rise, because of the dollar's inflation. But that's not the only reason (obviously). If Biden announces anything related with the dollar, then there may be panic from the market. Biden is the reason, but not the cause of price's increase. It's the thought that Biden will affect it that causes it!

Supply and demand have nothing to do with these abrupt changes in the price. (that usually don't last long)

[jjdub7]

Hi, why is the bitcoin price increase or decrease seemingly attributed to economic issues of the day?  A recent headline said Biden's trillion dollar package caused the price to hit 60k+.  Surely bitcoin is purely based on supply and demand isn't it? 
Thanks.

The price of Bitcoin as well as everything that is offered on the market is determined by supply and demand. When the demand for bitcoins increases, the price rises, and when the demand decreases, the price decreases.

It is normal for certain news of the day or actions by political forces to influence to the supply and demand.

[kryptqnick]

The price of Bitcoin is not set by any authority and cannot be regulated, so in this sense it's indeed dependent solely on demand and supply. However, a rapid increase of demand for Bitcoin, for instance, usually has its own reasons which may lie in events like stimulus checks or news on big investments of reputable companies in Bitcoin. Similarly, FUD and trigger a decrease in demand of Bitcoin, so the price goes down. For instance, a year ago, the price dropped after the announcement of the global pandemic by WHO. So some events can indeed affect the demand and thus can be helpful to understand why the price moved up or down significantly over a short period of time.

[Ronny29]

News in the world does not have much impact on BTC pricing, but news, as major companies and market giants continue to invest in BTC, more and more players enter the market. No one is interested in the collapse - only growth.

[doctor877]

A lot of things can happen at the time same and one can be termed as coincidence which is the case of this stimulus check. we are witnessing the inflow of top people that are buying into bitcoin without any announcement. the move of bitcoin is not tied to the stimulus pay. its not a once off thing, its a continuous move.

[Wilhelm]

BTC is worldwide not only US.
There will always be news that you can correlate. Doesn't make it true...

[KTChampions]

BTC is worldwide not only US.
There will always be news that you can correlate. Doesn't make it true...

On the one hand, this is so, on the other hand, the United States is one of the leading economies in the world and its influence on any processes is much greater than any country from the second hundred, isn't it?

As for the questions of the author of the topic about supply and demand, it must be clarified that we are always talking about effective demand. And everything immediately becomes clear