Bitcoin, the cryptocurrency with the highest market capitalization and the costliest per coin value has many different ways which decide its value in the market. Bitcoin, like regular currency, does have a single value of about 32000 USD but it is not always bought in retail at a fixed price. Since mining of a bitcoin doesnâ€™t happen altogether but in fractional values, the price of a single bitcoin changes. Also, other factors take effect on the overall value of the bitcoin structure. Let us go through and understand how the value of a single bitcoin is variable.
Factors affecting the price of a bitcoin
- The number of fractions a bitcoin is divided before selling.
- The amount of processing fee and transaction fee that is being charged by the company selling the mined bitcoins.
- The total market capitalization and the equity of the bitcoin in the market at the time of purchasing the bitcoin fraction.
- The demand of the particular blockchain of coins that have been produced.
- The amount of energy and other resources used by the miners to mine the particular bitcoin.
- The market value of the bitcoin throughout which the coin is being sold.
- A recent event shows tweets of some popular personalities also take a toll on the bitcoin prices.
How do these factors affect the prices?
- The number of fractions the bitcoin is divided into determines the total number of transactions that have been done against a single bitcoin. Each transaction takes a lethal amount of money towards transaction fees and thus more transactions lead to an increasing number of processing and transaction fees which later increases its value.
- The number of fees charged by the companies also lay a major role. Some companies accept transaction and processing fees by multiplying their base fee with the fraction of bitcoin you are interested in buying. This also leads to different prices of bitcoin in different selling departments. Visit bitcoin to invest in the crypto business at a low rate.
- The total market and equity price of bitcoin always becomes a major factor in determining the price of a single bitcoin. The shares of a different company in the cryptocurrency business help to determine the total value of the shares of the bitcoin thereby changing the current value of the bitcoin depending on the inflation or deflation of its shares. Thus the market price becomes a major factor here.
- The demand for a particular blockchain makes it more attractive to people for which the buyers of a particular bitcoin from a highly productive blockchain increase. Hence the number of fractions of a bitcoin increase which ultimately leads to the increase of the transaction fees making the bitcoin costly.
- The resources that have been used by the primary mining company also takes into consideration. To divide the wealth equally, a certain percentage of the bitcoinâ€™s value is shared to the mining company by the selling company. Hence if there is an increase in production cost due to factors like energy and electricity, the price of a single bitcoin increases.
- Tweets from influential people become a major factor in determining the value of a cryptocurrency nowadays. As we have seen how people have been keen on opening businesses rather than working on 9-5 jobs, people tend to listen to their business idols. Jack Ma, the CEO of Alibaba Group of China tweeted his interest in bitcoin which led to a solid rise in the value of bitcoin whereas similarly in recent times, Elon Musk, the CEO of Tesla and SpaceX when said he didnâ€™t invest in cryptocurrency the value of bitcoin fell by a large margin.
We have seen the different factors affecting the price of Bitcoin. Overlooking all the certain factors, we can say of the present, the value of 1 Bitcoin 33319.60 USD. (June 27, 2021)
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