Cryptocurrencies have grown in popularity for quite some time now. In fact, over the past five years, it has grown considerably, overcoming hardships and growing as a product to be taken seriously. But one thing that cryptocurrencies have yet to shake off is their extensive volatility. And the poster child of the entire market’s volatility, Bitcoin, is especially notorious.
And since Bitcoin is the biggest cryptocurrency in the market, volatility from it can rock the entire market. Most cryptocurrencies rise or fall as a direct result of Bitcoin’s actions, which is why investors have to be on their toes and eventually lookout for Bitcoin.
But by getting a better understanding of the factors that affect the prices of Bitcoin is essential. And one of the biggest factors that influence its price is attractiveness. Conventional methods of making money more valuable by affecting demand and supply does not work with Bitcoin. In fact, demand and supply rarely ever play a part in determining if the price will rise or not.
Instead, a major factor that can affect prices is attractiveness. As long as Bitcoin remains attractive, it will continue to be profitable and will keep rising. Attractiveness is usually a measure of how appealing a coin is as well as its reputation. Both of these factors can change drastically according to the news as well as political influence around the world.
Since positive news about Bitcoin can create a positive perception among investors. And a positive perception can go a long way in making them want to invest more into Bitcoin. As more people learn about the good things about Bitcoin, more investors will come in which can then increase the base of investors for the coin. And since the other altcoins are growing at such a rapid pace, Bitcoin will need a wealth of investors to sustain its prices.
Political strife and economic hardships throughout the world make it easier for people to accept cryptocurrencies like Bitcoin. The most current example of this is Cuba, which has recently made Bitcoin its legal tender. Since Cuba has embargoes placed by the US, they have adopted crypto to make for a more reliable way to pay for their things.
In fact, countries in Africa are also working to transition to cryptocurrencies, as hyperinflation is making their currency redundant. In fact, in countries like Zimbabwe, people had already adopted the US dollar as a currency. Therefore, transitioning to a cryptocurrency was not that hard for them. But even if the political landscape is just right, people still tend to join these services.