Reason bitcoin price ups and downs drastically

Reason bitcoin price ups and downs drastically

The crypto-currencies, as all other assets, see their prices vary depending on the market (based on supply and demand). In a simplified way, thousands of sales and purchase orders are configured at a given price and quantity. When someone buys, sometimes trading factors matter. People execute the cheapest contract (they buy at the best price). The person who wishes to buy after the first individual must do so against a more expensive order. You can therefore deduce that the price has increased.

The events

Variations in the prices of cryptocurrencies (and stocks) do not depend solely on speculation. Important events can take place, making the course go up or down. Thus, when a cryptocurrency is introduced on a new mainstream exchange, new buyers will be able to acquire this crypto, and therefore its price increases. Conversely, when a hack on a cryptocurrency takes place, its price drops.

The result of an asset price event reflects the confidence that investors have in it.

What makes your value go up

As it is already seen there happens not to be entities to trust, there are no banks that claim that this money is there, it is real. Instead, Bitcoin’s validity lies in its technology   that ensures it works like a real currency. And in the trust that people place in him.

And one of the reasons why people start to look at Bitcoin and want to acquire it is when possible scenarios are announced that may affect the economic stability of a majority. Over the past few years, predictions of possible events that could shake the financial ecosystem coincided with big rises in Bitcoin.

Bitcoin drops

Like the rises, the descents of Bitcoin are also related to a wave of events or information that may affect the development of the cryptocurrency. When you start to doubt the confidence of the digital currency, it loses its followers, people stop wanting to acquire it and therefore it falls.

With each attempt at regulation, unfavorable opinions from expert economists or governments, and even false news, the market use to be waiting to check what happens, they are afraid, and their intentions to sell exceed those of buying. And the price is going down. And the lower down the less people are willing to buy. Again supply and demand.

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