What affects the price of Bitcoin?

The price of Bitcoin is the monetary cost of a bitcoin. The term "price", as used here, should not be confused with the "value" that is a perceived relationship of the benefits and the utility of Bitcoin. The price of Bitcoin is expressed as an exchange rate in relation to another currency. So, for example, the exchange rate of Bitcoin to Dollar can be $ 1,750 for a bitcoin, written as $ 1,750 BTC / USD.

Bitcoin has been designed to create a total of 21 million bitcoins for more than 100 years, according to a logarithmic release function. At the time of writing this article, there are just over 13 million bitcoins in circulation, which means another 8 million bitcoins will be extracted in the next 95 years. Given this time scale and the deceleration rate of the monetary base increase, it is assumed that the supply of bitcoin can, for all practical purposes, be constant.

With a greater use and greater adoption of Bitcoin, the demand for bitcoins will always be increasing. With a constant supply and growing demand, the only factor in the equation that can change is the price of bitcoin, in particular it would go up. Therefore, in the supposed increase in demand, the price of Bitcoin increases gradually in the long term and if that demand is not met, it may be worth nothing as well.
The varied functions of Bitcoin
Bitcoin has many functions and uses, but in this analysis only those that affect price fluctuations will be taken into account:

1. Bitcoin payment network: Bitcoin as currency.
2. Storage and Transfer of Bitcoin: Bitcoin as a wealth reserve and means of transmitting value.
3. Bitcoin Exchange Rate: Bitcoin as a market and commodity instrument.
   Bitcoin Payment Network

Transactions in Bitcoin are made permanently and throughout the day. At the time of writing this article, an average of 62,000 Bitcoin transactions are carried out every day with an average volume of $ 50,000 per day.

Of course, transactions in the Bitcoin network do not directly affect Bitcoin's market price. In the sense that an active Bitcoin network reflects a healthy protocol that enjoys a variety of use and demand, there is an indirect influence. Only when the Bitcoin interface with other currencies - in the exchange houses - there is a direct impact on the price of Bitcoin. SUMMARY... The pushes and pulls in the price of Bitcoin are diverse. Some are slow but constant, as is the gradual increase in the supply / demand curve of a stable bitcoin supply base. Others are violent and sentimental, such as speculative operations that result in the purchase and sale of tens of thousands of bitcoins each day through exchanges.

The Bitcoin price charts show an increase in the average price despite the opposing pressures that often exert their influence on the long-term market. The balances of some and others as merchants and consumers in the predominant purchase or tendency to sell.

Banks and governments for the most part react erroneously to the disruption of Bitcoin. Some are embracing innovation, while others are caught in arrogance.

Some aspects of Bitcoin, such as contracts, have not been explored and promise to add additional value, and, therefore, price increases in the future. SOURCE: CryptoCoinNews © OroyFinanzas.com ![](https://steemit