What are the main factors that affect the price of Bitcoin

Everyone knows that Bitcoin is highly volatile, even if the price sometimes seems to stabilize. It is therefore legitimate to ask what are the factors that help to establish the price and how to prepare for future variations in coinmarketcap.

Government regulations. Some would like to see Bitcoin regulated. When a government regulates it, it declares it legal or illegal. If it is legal, laws can measure its usability and longevity. On the other hand, others fear that government regulations will undermine the decentralization of Bitcoin and that governments will take control of it and put it into circulation more and more, which would lower the price. Since there will never be more than 21 million Bitcoins issued, theoretically, the value of Bitcoin can only increase over time instead of decreasing. Depending on whether everyone interprets government regulation announcements, some, out of fear, start selling, others buy more than expected. This punctually varies the course.

Customer behavior. We know that more and more traders are accepting Bitcoin. While this has no direct influence on the price, at least in the short run, it really helps to introduce Bitcoin, worldwide, as a viable currency. A bigger coinmarket is offered in Bitcoin.

The mining. The cost of extraction of Bitcoin in general is a slight factor of decreasing the price. While some “miners” are saving their Bitcoins as part of their long-term investment strategy, others are selling some to pay their large electricity bills.

News. The Bitcoin news is made of good news and bad news: new e-businesses that accept Bitcoins, bankruptcies platforms … .This news leads to sales and purchases that vary the price.

The volume of activity in Bitcoins of e-commerce sites. Sooner or later, these sites, which can not manage their accounts only in Bitcoins, must exchange them for official currency. The larger the trader, the more these sales affect the price of Bitcoin.