What determines the Bitcoin price? | Bitpanda Academy Lesson 15

What drives Bitcoin price. Short answer, supply and demand. But what does that fall under? Keep watching to find out more.

#Bitcoin #Price #Bitpanda

This video isn’t a price prediction push, if we knew future price of one Bitcoin, or any cryptocurrency for that matter I would take my crystal ball and move to a tropical island.

That being said, there are some clear fundamentals you can look into that can help you evaluate if Bitcoin has any future value, and what that value is. Also, is there any risk of Bitcoin going to zero.

If you’re looking at investing or education yourself on Bitcoin, it’s important to understand what determines the Bitcoin price?
Unlike fiat currencies, such as the Euro or the US-Dollar, the value of Bitcoin isn’t defined by a single entity like a central bank. Instead the price is defined by supply and demand, or in simpler terms, by the price people are willing to pay for it.

▬ What does that mean? ▬▬▬▬▬▬▬▬▬▬▬▬
When there is more demand for Bitcoin, the price goes up, when there is less demand, the price goes down. This is why you’ll hear phrases, it’s a buyers market. Meaning supply exceeds demand and that is reflected in the price of Bitcoin.

Also, scarcity is something to consider. Do you remember growing up with the phrase ‘money doesn’t grow on tree’s’? Well, that’s also true with Bitcoin, as the maximum Bitcoin supply is fixed at an upper limit of 21,000,000 BTC. Meaning once all 21,000,000 BTC are in circulation, there is no more.

▬ How to evaluate Bitcoin Price? ▬▬▬▬▬▬▬▬▬▬▬▬
So how can one evaluate Bitcoin price based on demand? Demand depends on a number of factors, such as global events including price declines and advances in prices of stocks and bonds and economic developments on a global scale.
But, unlike monetary policy in countries with fiat currencies, the Bitcoin ecosystem is a fully decentralised monetary system. No one central authority regulates it, Bitcoin just follows detailed rules in a very strict protocol, such as
Transactions added to the Bitcoin blockchain are coded and set in stone forever
A new block is added to Bitcoin’s blockchain every 10 minutes
The only time a Bitcoin protocol will change is when the block reward amount that miners get decreases in a process called “Block Reward Halving”.

Bitcoin has the highest trading volume among cryptocurrencies, but it’s still a smaller market compared to other global markets. This means that prices make bigger moves up or down with less money involved. If Bitcoin were to have the same trading volume as, for example, gold, then its behaviour would be very similar in terms of volatility.

As there are only a limited number of bitcoins in circulation and the creation of new bitcoins follows really strict rules set within the codes of the blockchain with a consistently decreasing output because of shrinking rewards for miners, demand would have to follow the deflationary behaviour of Bitcoin to even theoretically keep prices stable.

There are also currency risks for large holders of Bitcoin regarding liquidation as well as security breaches may also influence the Bitcoin price. It’s been seen many times that security breaches even on trading platforms can impact the price, however, this was typically seen in the early days of Bitcoin. As the market capitalization of Bitcoin grows, and more and more Bitcoin are in circulation and traded daily, the maturing market seems to withhold price fluctuations with fewer price dips.

▬ About Bitpanda ▬▬▬▬▬▬▬▬▬▬▬▬
Bitpanda is a fintech based in Vienna, Austria and was founded in 2014 by Eric Demuth, Paul Klanschek and Christian Trummer. Bitpanda has 2.5 million users and more than 450 team members. With a PSD2 payment service provider licence, state-of-the-art security and streamlined user experience, Bitpanda has grown into a popular trading platform for newbies and experts alike. The goal is to tear down the barriers to investing and personal finance through digital assets and blockchain technology like cryptocurrencies, precious metals, fractional stocks and ETFs and to bring traditional financial products into the 21st century

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[roberthengl]

This was very helpful - especially the part with downloading the history of your transactions, and keeping track of all selling, buying, trading etc.

[davidgarrett]

Please why is bitpanda doing to there app on android I can’t send my bitcoin

[davidgarrett]

Please when do you think bitpanda will solve there issues on android p

[sdspecy]

Damn, she’s gorgeous! Didn’t listen a word she said 😛