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It is no news that bitcoin is the safest cryptocurrency out there and like most currencies, it fluctuates based on certain factors as explained below.
1. Rate of adoption
it is stated that the value of a network increases as the number of users on the network increases. So the more people that join the bitcoin train, the more the price rises. Remember the law of demand and supply i mentioned earlier.2
2. Exchange listing
This is the bomb really when it comes to making money with cryptocurrency. When a new cryptocurrency completes its ICO (initial coin offering), it is listed on the exchange so it can trade against other cryptocurrencies (including fiat currency). This list has an effect on all other cryptocurrencies too. A coin that you bought at say $0.02 can rise to $10 or more after listing. Since bitcoin is the prototype of all the cryptocurrencies, their prices usually follow that of BTC.
3. Political risk
During national elections, the currencies of countries are affected and bitcoin is not exempted. You will see money being moved around and since it is cheaper, faster, provides anonymity and convent to move money with BTC, the price moves up or rallies.
4. Regulations by governments
An example here is when a nation's government decides to adopt bitcoin as a mode of payment. This pushes the price up as there will be more demand for the currency. Also when its use is banned by a country’s government, the price drops. You should note here that this decision by the affected government affects the price worldwide and not only in that country. So you can profit from such decisions. You only have to be aware of such decisions.
5. Public sentiments
The public opinion about a coin is also important. If people believe the price of bitcoin will crash, they will sell and this will drive the price down and vice versa. These public opinions are driven by investors and media platforms.
6. The Whales
Cryptocurrencies suffer from wild fluctuations in value with prices going up and down an average of 5% in 24 hours. These fluctuations are called volatilities which are highly profitable for both traders in the crypto and forex markets. These volatilities are caused by whale investors. A whale investor is an individual or a group of people that can manipulate the market using their massive crypto wealth. When you see a sudden jump in price on the chart, it is sure there are one or more whales in the market. The decision of rising or fall of a crypto is always between whales. For example, if 5 bitcoin whales decide they want to sell their coin at the same time, this will cause a drastic crash in price. With the price now lower, they can buy more. This is the simple principle of trading. this how they influence the price of bitcoin.
Finally, remember that bitcoin has relationships with other currencies of the world while the price of ail other cryptocurrencies is also related to the price of bitcoin. That is when the price of bitcoin goes up, so does the price of other cyrptos
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