Why is The Price of Bitcoin Increasing?

There are many articles on the internet, but one will provide you with accurate information and facts that help to pump the bitcoin value or price. For example, in 2013, the cost of bitcoin was $5, and in this Crypto Trader App, the current price was $48,488 at the time of writing the article. What a rapid and high change in the value of bitcoin. So without wasting time, let’s understand the facts behind increasing the bitcoin price.

Understand the demand and supply:

Demand and supply play a significant role in controlling the price, not in bitcoin but all other fields or products. There are the following four things that will show you whether the price will increase or decrease:-

  1. When demand increases, Prices will automatically increase because people will be ready to buy at any price.
  2. When the demand decreases, the price will automatically decrease because people do not demand the products, and with no demand or desire to buy, people start selling at a low price; hence, they will decrease.
  3. If supply is high, the price will automatically fall because there will be more supply of products or bitcoins, and people will buy at a low cost since they know there are many products or bitcoins. So that is why they do not worry about purchasing because they know supply is high.
  4. If supply is low or limited and demand is high, then the price will increase rapidly. There will be a sudden change, and you all see it in the market. If you need something urgent and it is limited in the market, you will be ready to buy at any price.

So the price of bitcoin depends upon the demand and supply of the market. If there is high demand, then the price of bitcoin will increase, and when the order gets low, people start selling at low prices, and the price will decrease. Media plays a significant role in the supply and demand of bitcoin.

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Many news or headlines on social media went viral, something like “Price of bitcoin will touch $1,00,000 after five years”, and when you see this headline, you will immediately buy bitcoins. It will increase demand, and by increasing demand, the price will automatically increase.

Limited in Supply:

There are a total of 20 Million plus bitcoin that is limited compared to other crypto coins like Dogecoin, Etherium, or other high supply currencies in billions. It is also the primary cause for the increase in bitcoin price because it is limited in supply. Here the question arises, why is bitcoin limited in supply? Well, the answer is its complex algorithms.

If you want to produce a bitcoin or circulate bitcoin in the network, you have to solve complex mathematical problems and know how to program. It requires more electricity or computational power to solve an algorithm that an ordinary person cannot solve. Hence it is difficult to circulate new bitcoins into the network, so there is limited supply and demand of bitcoin is rapidly increasing and price too.

Value Creations:

If something creates value in your life or solves real problems, people will be ready to buy at any price. The more issues solving products, the more will be the price. First is the first cryptocurrency that is popular today because it adds value to your life. There are the following values that bitcoin add to your life:-

  1. Bitcoin is the most secure currency that means it is impossible to hack since there are many computers or nodes working behind it. So if you want to hack bitcoin, you have to hack all the bitcoins worldwide working behind bitcoin and blockchain.
  2. Bitcoin is a decentralized system that means third parties have no control over it, such as the government, banks, the president, financial institutions, and even the founder of bitcoin. Bitcoin is a separate entity.
  3. Bitcoin provides tax-free transactions. Over 1,60,000 merchants use bitcoin as a payment gateway because it is tax-free. Government has no control over bitcoin, and they cannot track the transactions. Hence, it became popular in a few years.
  4. You have to fill in your personal information if you use other services like banks or financial institutions, but you have all the control over your bitcoin. For example, no one can suspend your wallet or trace your balance because you have a private key.
  5. Your identity is anonymous on the bitcoin network. No one can see your details, or there is no need to fill in your details.
  6. You can spend your bitcoin all over the world with low transaction fees. But on the other hand, third parties charge high fees.

So the above are the significant reasons that pump the bitcoin price: demand and supply, second is limited in-store, and third is value creation.

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