Bitcoin Price: A Complete Guide for Beginners
Starting off, all things and anyone associated with the use of currency in the form of crypto can be overwhelming, but there is one word that overrides them all, and that word happens to be ‘Bitcoin.’ And, in case you understand what a ‘digital currency’ is and are provoked as to why Bitcoin price is showing up in headlines everywhere, this article will explain to you the gist.
Understanding why Bitcoin shall be valued is actually not as difficult as it seems. First, it will be useful to break down all terms into the ‘simpler’ version in order to make one understand the points without getting into the mire of names.
Why Does the Price of Bitcoin Fluctuate?
Well-documented is the volatility in the price of Bitcoin, a real characteristic quite unconventional when put in the light with other currencies such as the US dollar and the Euro, whose values are backed by some government or pegged against a commodity like gold.
For instance, in 2017, Bitcoin was highly appreciated at around $20,000, then nosedived at the commencement of 2018 to about $3,000. This sort of class-action lawsuit certainly hit the nail on the head regarding the volatility of prices
Main Factors Influencing Bitcoin Price
1. Media Attention
The movements of prices can also be attributed to incoming information about or around Bitcoin, as well as events relating to it. News that a large company, such as Tesla, is accepting Bitcoin as payment would likely drive the prices upward. On the other hand, negative media features or regulatory activities against such infractions could attract severe punishments.
2. Supply Limits:
But beyond the comparative interest Bitcoin draws to itself, there is one peculiar and distinctive characteristic differentiating it from every other currency: a supply capped at just twenty-one million coins. If this ceiling is reached, no more coins will be created through mining, and Bitcoin will become a genuinely scarce digital commodity. This rarity itself acts much like limited-edition impressionist artwork, supporting the high prices of collectibles. The supply is pinched against demand in a perfect storm that sends the price of Bitcoin through the roof because of its rarity.
3. Market Sentiment:
It may also be affected by the feelings of the holders, wherein if they think that it is time to leave the market because it is likely to go down, they are likely to liquidate their possessions in a snap, which would put it down. The same holds true when investors feel a bullish trend coming; they may have felt the urge to enter an engulfing trade, and as a result, it is likely to surge.
The Bitcoin Price: How to Watch the Trends
It’s the ordinary habit of traders and investors to watch the price of bitcoins each day. Given this fact, it is quite reasonable to assume that many of them will try to guess the next big movement. Yet, one should understand that Bitcoin is extremely volatile, and there is nobody who can predict precisely what the cryptocurrency Bitcoin is going to cost next.
But how do you track such price movements? One of the possibilities is to look for reliable and timely market tools and news updates. If you are a beginner, one possibility is Binance’s own Bitcoin Price Tracker, which provides real-time news and updates on price movements.
Should You Invest in Bitcoin?
With the buzz possibly stirred by the value of Bitcoin, it is not out of place for people to ask questions such as whether we can really invest in Bitcoin. But in our opinion, the reasonable way to deal with Bitcoin is: though there are people who have made their fortunes out of it, yet there are others who have lost a lot thereof.
You may consider your risk and your finances before proceeding. Bitcoin is fit for investment in the ways that it can be included in a wide array of investment options; however, it is better that the consolidation strategies, such as going all the way, be avoided, especially in the case of volatility staking such as cryptocurrency.
How Does the Price of Bitcoin Work?
First and foremost, it seems that Bitcoin is an incomprehensible currency. Suddenly, it leaps into the dark and almost baffles all logical assumptions on the part of so many investors. Mostly, its price reflects various factors that would come forth and allow its predictions. Be it for investment in cryptocurrency or curiosity about the current state of the market; one should give a second thought before going ahead with Bitcoin, considering that this cryptocurrency has been known for incredible volatility.
First and foremost, Bitcoin belongs to a wide category of cryptocurrencies. Spending some time in research will arm one with basic knowledge points that might lead to enlightenment ideas on how Bitcoin impacts your financial situation. You can check out various sites like investopedia which provide information about bitcoin mining, investments and similar sorts. This will place you in a better position and allow you to make informed decisions about your investments in light of a world of digital currency that changes daily.