I'm sure you've observed the increase and fall in the price of cryptocurrencies if you're an active investor or someone trying to get into the crypto market. The Bitcoin market has surpassed $1 trillion in value. The story
of how the company grew from humble origins to a multibillion-dollar conglomerate is inspiring. However, there has been a significant rise and fall in the pricing and value of cryptocurrencies in the midst of it all. Despite the fact that there are many different Cryptocurrencies, Bitcoin is the most popular. No one could have predicted that in 2009, 1 Bitcoin would be worth $35,813.10, and no one could have predicted that it would be worth $35,813.10 today. Despite a recent price drop, Bitcoin has maintained its status as the preferred cryptocurrency among cryptocurrency experts.
Why does the price of cryptocurrency fluctuate so much?
Before we go any further, it's worth noting that when the number of suppliers exceeds the number of customers, prices tend to fall. In the crypto exchange market, cryptocurrency functions similarly to equities.
The birth of bitcoin was influenced by a number of factors.
Institutional adoption is one of the main causes behind the surge in cryptocurrency values. Bitcoin is seen by many investors as a safe investment against inflation and market instability. Many businesses have begun to transition from cash to digital currency. With a $50 million Bitcoin purchase, Square is one of the examples we have for you. In addition, Microstrategy exchanged $425 million in cash for Bitcoin. Bitcoin investors believe that it is considerably more profitable to invest in Bitcoin than it is to use a traditional bank. These are just a few of the companies that are converting cash to digital money at the moment; there are many more.
PayPal is one of the most well-known names in the industry. It announced in 2020 that it would add a cryptocurrency exchange on its platform.
What causes a price drop?
The main cause for the drop in cryptocurrency prices is the halving of Bitcoin. We all know that every four years, Bitcoin gets halved, with the most recent halving taking place in 2021. This is the third time the procedure has been carried out. To maintain track of the total amount of coins in circulation, the halving was implemented. There are only 21 million Bitcoins in circulation, and as the rewards for miners decrease, the price of bitcoin falls.
In addition, several rumours are circulating in the market. The price of cryptocurrency is influenced when this becomes too obvious.
final thoughts
This was the most crucial piece of information that influences bitcoin pricing. To grasp the elements that drive the crypto market, you must keep a careful eye on it as a crypto investor. The Blockchain Council offers cryptocurrency investment certification as one of its courses. This course will teach you all you need to know about cryptocurrencies, including how to invest in them. Contact the Blockchain Council right now to enrol in this programme.