Since it became popular, Bitcoin has gained a reputation for being quite volatile across the market. In other words, Bitcoin’s price is known to go up and down sporadically—it never stays at a fixed amount. There are several different reasons behind this, and the following article is going to make sure you understand them all in detail. Grab your notepad and get ready to learn about the major influences on Bitcoin trading.
1. The Media
The media has a huge influence on Bitcoin trading, and typically, it hasn’t been particularly supportive of Bitcoin. This is because most traditional media outlets are government-backed. Governments don’t have any control over Bitcoin (or other cryptocurrencies), so there’s no benefit for them.
However, some media outlets are supportive of Bitcoin. For example, Forbes is a big advocate of Bitcoin and has had some positive influence over Bitcoin investments and trading.
In the future, if more media outlets start to endorse cryptocurrencies (which is highly likely as the world becomes more digital), then millions more people will start to trade.
Whenever the media makes a statement about Bitcoin (good or bad), make sure to visit OKX.com’s Bitcoin current price charts.
2. Celebrity Endorsement
Celebrity endorsement also has a huge effect on Bitcoin trading, as highlighted by Elon Musk. Musk is a huge figure in the tech industry and has over 100 million followers on Twitter. Therefore, when Musk speaks, people listen!
Recently, Musk endorsed Dogecoin and made it so that Tesla would start accepting it as a payment medium. As a result, Dogecoin skyrocketed in value; and with continued support from Musk, Dogecoin might someday reach the value of Bitcoin!
International regulations are a big deal when it comes to Bitcoin trading.
Currently, most countries allow people to freely trade Bitcoin however they like (after all, there are no regulations in place within these countries). However, some countries are very harsh on Bitcoin and don’t allow it to be traded at all. Take China, for example, a country that banned Bitcoin mining and cryptocurrencies more broadly. At the time, this caused Bitcoin’s value to drop from around $65,000 to $35,000; sending shockwaves through the industry. When you consider China’s sheer size and scale, this was to be expected.
4. Inflation and War
Since the COVID-19 pandemic and the Ukraine—Russia war, the world has been experiencing an inflation problem. As a result, this has placed downward pressure on Bitcoin whilst fueling the growth of the dollar. This is why cryptocurrency trading has slowed down throughout 2022. However, when the economy finally starts to recover, it’s expected that a new “crypto boom” will take place.
After reading this article, you’ll now understand the key factors that influence Bitcoin trading. If you ever start to trade Bitcoin in the future, these are factors that you’ll need to keep an eye on. This way, you’ll be able to make smarter decisions regarding the Bitcoin trades you make. For example, if the US was to ever ban Bitcoin (which isn’t likely), then this would cause Bitcoin’s value to tank. Make sure to bear all these factors in mind!