5 Things That Determine the Price of Bitcoin
Has the price of Bitcoin (BTC) been too expensive? Does Bitcoin have intrinsic value like metal gold? When market physiology feels that the price is too expensive, then the item will "bubble" (bankrupt). Is the price of 6400 USD too expensive for 1 BTC when this price has touched 19,000 USD?
And this is the 5 causes of the rise and fall of bitcoin prices according to what I know.
- Whale
What is the whale? Whale here is not meant by whales but people who are very wealthy play in this market. Whale here can also be likened to 'Sultan', they can buy BTC with tens of billions of USD. Although their numbers are very small, maybe 3-4 people, they have made demand in the crypto market. If you look at it from the chart, there will be a line up and green. 3-4 people vs. many people who buy only hundreds of millions of dollars in total, surely ordinary people will lose. When ordinary people feel the price will be higher, they immediately buy a lot and prices will soar even higher, at this time whale will sell their BTC and prices fall again.
- Bitcoin and Gold
Bitcoin (BTC) is digital gold because many people equate Bitcoin investment with Gold. Here, we equate BTC with the gold attribute. Gold is very difficult to mine, very rare and expensive and the same gold calories have the same value anywhere in the world, large pieces also have high prices and small pieces have lower prices. Currently, Bitcoin mining is becoming more expensive because the price of computer components (VGA) is very expensive and not in line with income. Not only that, many people are already interested in Bitcoin and too much demand than supply. It is undeniable, the future of BTC is very positive.
- Psychological Factors
Bitcoin prices are also driven by psychological factors. Inventors, in particular, are affected by market sentiment from other investors or people around you. For example, your office mate has already bought 1 BTC but you haven't and the BTC price is increasing, you definitely think of buying BTC because you will get a profit. This feeling is actually due to pressure from office friends and the desire to profit. It is this Psychological Strength that will make BTC prices rise further.
- Acceptance from the community
Many large companies accept Bitcoin as a means of payment. Not far away, the Hublot branded luxury watch makes a watch that is specifically sold with Bitcoin. In America, people can buy cars, apartments and even coffee with Bitcoin. Companies such as Bitpay make it easier to spend in large supermarkets abroad. You could say in a few years, Indonesians might receive crypto money, especially Bitcoin and Ethereum.
- Government
It cannot be separated anymore that government regulation is very important. The government can make the gold money illegal or legal. Small countries are clearly not going to interfere with prices, but large countries like China and America can make the price of USD 6000 to USD 1 in 1 news.
What kind of news is this? Example: China and America will not accept Bitcoin and consider Bitcoin as the terrorist currency. If the word news like this comes out, I can make sure the price of Bitcoin will drop, there might be no price at all. Conversely, if they issue news such as: You can buy all items with BTC, BTC prices will rise and stabilize.