Bitcoin is a decentralized peer-to-peer electronic exchange. In other words, this means that people can send money directly to each other without using a bank or third party as an intermediary.
Therefore, Bitcoin does not follow the monetary policy of governments, and is not backed by any underlying asset.
The volatility of these prices has left many skeptical of the mathematical and economic basis of price movements while searching for a broad rationale for its valuation.
We invite you to read on learn more about bitcoin quote.
What is a bitcoin quote?
Today, if we talk about Bitcoin financially, investing in it is far from an easy task. BTC which is a crypto financial asset that benefits from a listing on various market places.
This makes it possible identify frequent and rapid changes of Bitcoin value. Therefore, it is very important to know that the function of bitcoin quotation is different from traditional financial markets.
In fact, you may notice that marketplaces for various cryptocurrencies are open all week, 24/7. If you compare them with the prices of stock indices or shares of different companies, they are usually closed on Saturdays and Sundays and open Monday to Friday.
As a result, the Bitcoin quotation can only be continuous as in the Forex market.
How bitcoin pricing works
Bitcoin doesn’t know no fixed value nor an official rate. The quotation allows the average price of BTC to be allocated in dollars, on several platforms around the world that specialize in the exchange of cryptocurrencies.
This method is used by many websites, including the most famous CoinmarketCap.
The law of supply and demand allows you to manage bitcoin quotations. However, it should be noted that the reasons for the sudden increase and decrease in prices remain difficult to explain.
Since the creation of this cryptocurrency, its quotation has faced many variations. In 2017, for example, its value increased by $1,000 to $19,000. Last November, Bitcoin surpassed $68,000, reaching its all-time high.
Why does the price of bitcoin fluctuate?
Many factors can influence the price of Bitcoin, whether in the short or long term.
For the short term, very often, bitcoin prices move up or down in relation to market decisions (good or bad). Take for example the closures announced due to the Covid-19 pandemic in 2020, 50% of quotations were unscrewed within days.
In the same way, upward or downward fluctuations in the market also cause a ripple effect. All investors follow this movement and highlight it, especially on the basis of technical analysis.
Besides this, for long term, what will affect the price of Bitcoin is mainly the regulation and large-scale adoption of digital assets by more and more institutional investors. Finally, it should be considered that the amount of Bitcoin generated is limited every four years and will be divided. Thus, supply will decrease and there will be upward pressure on prices.
It should be noted that there are some other external influencing factors the fluctuations of the price of bitcoin, among them, we can mention:
- Other cryptocurrencies expected by companies (Diem from Facebook);
- Macroeconomics;
- The various financial markets;
- The stock exchange;
- Possible currency and trade wars.
Which currency should you choose for Bitcoin quote analysis?
As mentioned before, BTC has no link to official financial markets like gold and oil. As a result, its rating is not influenced by money in the event of its increase or decrease.
The bitcoin holder is so free to make a choice between the dollar, euro and any other currency present in the market to analyze its price. This also applies to conducting sales or purchase transactions for other cryptocurrencies.
Source: The Blog
Source
I am Ben Stock, a highly experienced news writer with several years of experience in the industry. I currently work for The News Dept as an author, where I specialize in market-related stories. My passion and expertise lies in providing readers with accurate and up-to-date information on the latest financial developments from around the world.
