Bitcoin is a decentralized peer-to-peer digital currency operated by users without a central authority and intermediaries. The average price of a bitcoin was fixed at about $ 11,118.92 at the end of July 2020. Bitcoin prices are subject to change as it is traded on a number of independent stock exchanges. However, the Bitcoin price index offers the average price among the leading global exchanges. Bitcoin came at a time of global economic crisis in 2008, when big banks were caught abusing borrowers ’money, manipulating the system and charging excessive fees. To secure owners ’money, bitcoin creators wanted to hold bitcoin owners accountable for transactions, eliminate the intermediary, reduce high interest rates and transaction fees, and make transactions transparent. A distributed network system has been set up where people can manage their funds in a transparent way. Bitcoin gained popularity and grew rapidly in a relatively short period of time. Many companies, hospitals and large-scale hotel businesses around the world deal with bitcoins. Some multi-billion dollar companies such as Dell, PayPal, Microsoft, Expedia and so on. He also deals with bitcoins. Today, websites also promote bitcoins, magazines publish bitcoin news, and forums also talk about cryptocurrencies and trading in bitcoins. However, there are issues related to bitcoin, such as hackers breaking into accounts, the high volatility of bitcoin, and long transaction delays. Nevertheless, bitcoin can be considered reliable, especially in third world countries,
When the coronavirus crisis disrupted global economic activity after the closures were introduced, traders moved from riskier assets to safer ones, such as bitcoin. In mid-March, the US Federal Reserve cut interest rates to almost zero and launched a $ 700 billion QE program to combat market chaos caused by the coronavirus crisis. This weighed on the stock market, with the Dow futures falling 1,000 points and making cryptocurrencies more attractive, pushing up the bitcoin exchange rate.
US dollar prices:
The relationship between bitcoin and the US dollar is negative, which means that when the US dollar is strong everywhere, bitcoin prices come under pressure and vice versa. BTC / USD has supported BTC / USD exchange rates due to loose monetary policy, interest rate cuts and the US economic crisis. The price of the US dollar has also been affected by the delay in the issuance of the US stimulus package by the US Congress, which has recently put pressure on bitcoin prices.
The value of bitcoin is highly dependent on the acceptance of devices by users. Cryptocurrencies are becoming more popular day by day and this raises the price of bitcoin as it is the most popular cryptocurrency. However, when the demand for the currency decreases, it results in lower prices. Currently, most users are switching to Bitcoin as their currency. It is also used as an excellent online trading currency. The use of bitcoin as an online transaction medium has increased recently, and the opportunities offered by its ease of use could lead to higher prices in the coming years.
The media is the most important source of information today, and the prices of bitcoin and other cryptocurrencies are also affected by its impact. Greater media coverage means that the public has a better understanding of the crypto market and bitcoins. If the media shows a positive image of bitcoin, it usually leads to higher prices for the BTC / USD pair, while negative media coverage can have the opposite effect on bitcoin prices.
Unlike central bank currencies, cryptocurrencies are inversely related to political events. Lack of confidence in a country’s economy tends to undermine the local currency, while people in such a situation gain more confidence in cryptocurrencies to replace traditional currencies. Bitcoin is the emblematic leader in the cryptocurrency market, so bitcoin prices tend to rise first when there is any political turmoil before the currencies in other markets are affected. A recent example is the dominant trade war between the United States and China, which has raised the price of bitcoin.
Government regulatory changes:
Bitcoin and other cryptocurrencies are heavily influenced by government decisions. As these currencies continue to be seen as a new concept in the market, governments are constantly changing regulations regarding the taxation of cryptocurrency investors. On one occasion, the world’s largest cryptographic market, China decided in late 2017 to close multiple trading platforms, and this caused a dramatic drop in the bitcoin price, resulting in a $ 100 billion drop in the cryptocurrency market in a single day. So government regulations have a dramatic effect on the prices of bitcoin and other cryptocurrencies.