Why is the price of bitcoin constantly changing?
Bitcoin is the first most popular digital cryptocurrency, the price of which depends on a wide range of factors. The price of bitcoin is usually expressed as the exchange rate of bitcoin against other currencies, most often against the dollar. Anyway, not only the law of supply and demand, but also the following factors affect the price of bitcoin.
1. Government Decisions
Every time the government publishes official statements about the regulation of digital currencies, the price of bitcoin changes. And when there are strict restrictions on the use of bitcoins, their price changes quite dramatically.
2. The influence of the media
Media can easily lead to price increases, and negative news can lead to price reductions. For example, news of bankruptcy or hacking on sites related to bitcoins, can cause panic and disruption to users of bitcoins, which will lead to lower prices.
3. Technological change and innovation
Technological advances and innovations can also influence the price of bitcoins. For example, the integration of bitcoins in the PayPal payment system has increased awareness and aroused great interest in digital currencies among most people.
4. Manipulations in the market
This is another important factor that can affect the price of Bitcoin. For example, traders can sometimes buy huge amounts of Bitcoin in the market in order to make the price jump, and then sell them again in the market in order to significantly increase their profits.