Know the Factors that Affect the Bitcoin Prices

If you have decided to start trading in crypto currency, you can trade in many coins. But while knowing the trade and getting experienced, you must try your hand in Bitcoins. We all know that Bitcoin gives the maximum return which no other currency can give. Since the value of Bitcoin is very high, one must go slow and take the investment decision carefully so that there is no loss. Before you jump into trading, you must know the Bitcoin factors that affect the market and creates some influence on its upward or downward movement of prices.

Below mentioned Bitcoin factors have some effect on the movement of Bitcoin prices.

1. Sentiment prevailing in the market

Price goes down when people get some negative news or information about the currency. Sometimes, people drag the promoters of crypto currency to court citing their regulatory objections. Many governments still have doubt about the regulatory implications of crypto currency and when some problems arise from the regulations of the currency, market sentiments turn negative. The more the information turns negative, the more the price of the currency starts going down.

2. Supply and demand

This is the most universal formulae in the world of economics. The supply and demand equation determines where the price of the asset will be headed to. At any certain point of time, if the demand of the asset is more than the supply in the market, the price will automatically go up and will go down if the reverse happens. With every passing day, more people are coming to know about Bitcoin and the miners just half their production after a certain amount of time, fuelling the demand of the crypto currency. You must know that the demand for crypto currency is increasing in every country of the world.

3. Competition from other crypto currencies

If you look a bit inside the crypto currency market, you can see that a new coin is coming up almost every day. Some young investors feel that it may change the rules of the game and start investing it selling their Bitcoins. For example when XRP from Ripple came into the market, people start believing that they will go quite high. As the promoters of Ripple were quite active for the last two years, many people left Bitcoin and got interested in XRP. But a sudden lawsuit against Ripple changed everything and its price started diving southward.