Reasons for Frequent Changes in Bitcoin Price Live
A line of computer codes that holds monetary value is best defined as cryptocurrencies and these are created by electricity and high-performance computers. Bitcoin is not managed or controlled by a bank or any agency, BTC is used by individuals with cryptographic keys that act as wallets. The physical bitcoins that are shown in photos are useless until and unless they have a private code encrypted inside them. It is the currency of the future, everything is transiting into digital format currency and transactions should cope-up with the trend. Let’s have a brief idea about Bitcoin price live.
How is the price of bitcoin determined?
There is a difference between the price of bitcoin and its value. Price is determined by the market in which it is traded by the forces of demand and supply. Traders who have bank accounts can trade bitcoin on various exchanges at a particular time for a specific market. The exchanges do not set the price themselves the price is determined by buying and selling bitcoin on that particular exchange. In other words, bitcoin price determination can be quoted as ‘the ongoing interaction between sellers and buyers dealing with one another is the mechanism that determines the specific price of bitcoin’.
What changes the price of bitcoin so frequently?
The frequent changes in the prices of bitcoin is called volatility and it's not just bitcoin exchange that seems to change from time to time, the prices of things like stocks, currencies, oil, and other products, can be quite volatile, increasing or decreasing against a base currency which like USD. On a factual point though Bitcoin is gaining popularity at a tremendous pace is still a relatively small industry on comparing the total market with others. It is also not necessary to have huge amounts of money to move the market price in either direction, the price of bitcoin is still volatile.
Factors that can affect bitcoin prices
There are numerous factors that are able to disrupt the prices of bitcoin
In case a large stable government lets out that it is unsure about how to regulate bitcoin, then this will cause the price to fall due to a fall in demand.
If drug dealing sites that use bitcoin as their currency for trade shut down the price of BTC fall steeply.
There are many bitcoins available, and they are made at predictable rates, the owners or miners of the BTC are scattered, hence this gives the bitcoin giants who have bitcoin reserved in large quantities, this, when combined with the lack of liquidity, makes it easier for them to manipulate the market.
The prices of BTC are also pulled down by large traders who sell bitcoin in high volumes.
It is advised to be careful when it comes to bitcoin trading as it is a high-risk asset.