In one of my posts I have listed the financial factors that have an effect on the cryptocurrency price.
- the circulating amount
- the historical data
- supply/demand
- chain difficulty
- exchanges willing to work with the coin
- how useful the coin is to the community
- how easily it can be exchanged from and to fiat
- news and media coverage
- large-scale investors
- coin wealth distribution
- coin reputation
Bitcoin price depends on all these factors, just like any other coin. Let's examine how each one of these affect the price.
- The circulating amount of bitcoin is 16,866,500, the marketcap at the moment is $166,125,073,765, according to coinmarketcap.
It is a decent amount if you relate it to the number of active bitcoin wallets (around 200, 000, 000 usually).
- Historical charts (from $10 to around $20 000) show that this coin has the potential to grow fast and earn profit
- The supply/demand scale is working here as well, more people want to own bitcoin, more the price.
- Chain difficulty is very high, making it hard to mine, making the bitcoins more scarce.
- Exchanges - each day more and more exchanges are willing to accept this coin. For many cryptoexchanges it is the main coin all other cryptocurrency coins depend on
- The coin is very useful to the community. Starting from exchanges and ending in coffee-shops, there are many end-users who use this coin for their daily needs.
- Bitcoin is probably the easiest coin to exchange with fiat.
- News and media coverage happens on a daily basis
- Large-scale investors. This one is difficult to determine with bitcoin all of these, but the top players are well-known.
- Coin wealth distribution - the wallets to the number of bitcoin says it all.
- Coin reputation - excellent. This coin has proven to be hacker-resistant, anonymous and fair.
These factors always have an affect on the price. Lately the media coverage of bitcoin had more effect on the coin than other means. Everyone wants to comment bitcoin. Once you see "bitcoin ban news", the coin price goes down, once these news come out to be fake,the coin price goes up. When large-scale investors want to buy a substantial amount, the price also goes up. Read the news, make your analysis and you will see that it is not that difficult to predict price drops/changes.