In 2008, a mysterious entity released a white paper describing a new digital currency that follows a peer-to-peer network and is decentralized. The white paper described Bitcoin as an electronic cash system, and this news hit the headlines.
At the time of the financial crisis, this revolutionary idea was developed, and this shook the financial world as a new decentralized currency was developed.
Bitcoin became the first digital currency independent of the government and provided the integrity of transactions and promised security of users’ data.
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Bitcoin became the currency with no involvement of central authorities, including central banks or government, and it promises the general public to provide vast possibilities in the financial world.
This genius idea was developed when people distrusted central authorities, and also, this digital currency promises to help users make transactions within minutes, unlike traditional currencies.
The founder of Bitcoin is a mysterious entity, and the only name that came behind the bitcoin network is Satoshi Nakamoto. He introduced bitcoin at the right timing and promised to solve all the issues of users.
Bitcoin is the only digital currency that was expected to be the future of currency but suddenly, in mid-2010, the founder of bitcoin, Satoshi, disappeared.
Until then, the bitcoin network is in the hands of its community, and people understood the potential of bitcoin and considered it a store of value worth investing in.
In 2009, the value of a bitcoin was negligible, but in a period of very few years, bitcoin’s value raised to $10,000 from $1.
Throughout 2017, the graphs of the financial world changed due to bitcoin because its value reached skyrocketing.
No one can deny that many investors also lost their funds when the bitcoin market was down, but in 2017, many young investors entered the bitcoin market and invested their money.
When the bitcoin market fluctuated, it became a nightmare for investors who invested all their funds in bitcoin.
Despite their volatile market, cryptocurrencies like bitcoin and others entered into mainstream and helped businesses and companies to grow.
In 2020, at the time of the covid-19 pandemic, when the world was stuck and the businesses were shut down due to lockdown restrictions and curfew, it was time when cryptocurrencies got life.
All investors invested in bitcoin, and it provided the term of being digital gold.
A lot of traders and investors traded bitcoin and made huge profits.
Key factors that affect the price of Bitcoin
Unlike traditional currencies governed and controlled by the government, bitcoin is a valuable asset whose price is affected by its demand and supply.
Since bitcoin’s invention, the public compared it to gold, and the main thing about the bitcoin network is that its supply is limited because bitcoin is a computer code.
There are plenty of market participants that determine bitcoin’s value, and the main factor includes user adoption and usage.
Another main factor that influences the price of bitcoin is media coverage. In the early stage of bitcoin, its price was positively affected by media because media considered bitcoin for the dark web.
Undoubtedly, when people heard about the dark web, they scared potential investors and started moving back.
But fortunately, the media also covered bitcoin and blockchain technology and explained to people about features of blockchain that can help potential investors and traders.
The main feature that attracted users is the decentralized nature of both bitcoin and blockchain.
However, some people hesitated because the banning of bitcoin and other cryptocurrencies was still in the government’s hands. No one can ignore or deny the power of government.
One another factor also includes cryptocurrency regulations, and it is a negative factor.
No doubt bitcoin has entered the mainstream, but there are various regulations that bitcoin networks must follow.
When businesses and retailers started accepting bitcoin as a financial asset, it increased the price and demand of bitcoin.
Covid-19 pandemic also affected bitcoin’s price a lot, and during the pandemic, when everything was shut down due to restrictions, bitcoin’s value raised, and its value reached heights.
Bitcoin reward halving is also a factor that affects the price of bitcoin. Miners are benefited from mining rewards as they are provided an incentive for their hard work to mine bitcoins.
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