Today due to the changes in technology and in the way of doing things, we have seen the emergence of new things. The man has come up with many things that are meant to make the work of human easier. One of it is the emergence of cryptocurrencies.
They are made to make work easier for us. they are made to make sure that you trade easily without any restriction and hitches. They have been hitting the headline for almost 10 years and the one that has been popular all through has been the Bitcoin.
Have you ever had of it? do you understand how to trade with bitcoins and have you had a chance to buy some. Bitcoin has been hitting the headline for all the right reasons and the wrong once too. Well, to have an insight into what it is, you need to read along as I take you through.
What is bitcoin?
I know it is the first question that comes to your mind if you haven’t had a chance to come across this currency. In simple terms, bitcoin is a digital currency. A digital and global money system currency. The money allows people to send and receive money across the internet.
Sounds interesting right? Well, it is a brilliant idea that was thought by a man or a group called Satoshi Nakamoto. Bitcoin was meant to allow the exchange of money without it being linked to a real identity. This means that it uses peer to peer technology to operate with no central authority or bank.
Unlike the currency we are used to, Bitcoin is decentralized. There is no government involved, institution or any other authority that controls it, even the owner is anonymous. That brings us to the next question, how do they manage the bitcoin?
The management is done in a central place. It is a network that is coded, and anyone has access for as long as you have an interest in trading the bitcoins. That makes it an open currency, and everyone can be involved in the buying and trading.
Benefits of trading with bitcoins
- No boundaries
It means that it is not set by any currency. You can trade with it from anywhere since it is not controlled in one place. Anybody can trade with the coin for as long as it is accepted. This makes trade easier.
You don’t have to carry cash around for you to trade. It is a digital currency, you can trade online and transfer the currency to however you want. This makes online purchasing easier and secures all over the world.
- No transaction cost
Yes, unlike in the case of the bank transactions, when it comes to bitcoin, you won’t have to incur any transaction cost when you want to send or receive the currency. This makes trading with the currency cheap and convenient.
The owner is anonymous so is all the transactions that take place with bitcoin. This means money is exchanged without being linked to a real identity. This is cool, right? this has made more and more people want to trade with the coin.
Now that you have basic information about bitcoin and you have interest in obtaining or buying some, what do you need to know before you buy some? This is a question you should ask yourself as an investor before you dive into the trade.
I know you must have heard that each bitcoin has a price, right? even if you want to buy bitcoin, there is a price that will be attached to it. where do you find the current price? Well, the place to find out about the latest price of bitcoin is the exchange you want to buy them from.
Overall, the bitcoin protocol lays out the rules of this financial system. They dictate how many bitcoins can exist in a time and how they are created and transferred. What is amazing about all this is that the prices in the exchange usually varies.
Now, if you do a quick google, you will find the price of the bitcoin today is different from the one in the bitcoin index and the Windex. It leaves you with no option but to follow one specific trend if you want to buy and trade the bitcoins.
No, that you have bought the bitcoins at the exchange of your choice, its time you take control and monitor when is the best time to sell your bitcoin. Of course, you want to do it at a price and this is hay you need to know the history of bitcoin pricing to understand more.
Bitcoin pricing history
Like mentioned earlier, bitcoin is not all about hitting the headline for the wrong and the right reasons, it involves a lot of changes that have taken place for it to be where it is right now. For you understand you need to know the following;
- Bitcoin was invented in 2008-2009 by a mysterious man or a group of people. Its initial value was 0.001. within the next five years, they were no notable event. That means the price rose slowly as people get to know it and there was no major fluctuation of the price.
- In 2013, bitcoin attracted attention. That is when the Chinese government accepted a trade with bitcoin and started to buy bitcoin in large numbers. This saw the price increase by 1000% but unfortunately, it didn’t last for long. It was for a while before they closed the buying.
- In February 2014, there was an attack on their servers of the exchange that controlled up to 60% of the bitcoin transactions. It leads to an alert on system code change and in return, it caused a significant drop in the prices.
- In 2015 bitcoin gained popularity slowly and firmly with people gaining awareness of what it is and this lead to a rise in the prices.
- In 2016 bitcoin gained popularity and trust in the people. More and more investors were willing of buying and trading with the currency. This saw the prices rise significantly.
- In June 2017 there was a dramatic fall and the prices decrease by 14%. Since then, the prices have been rising slowly but steadily. The number of the transaction has slowly increased with the decrease of the transaction cost.
Knowing the history of bitcoin pricing is vital as an investor as it helps you to know what to expect when it comes to trading. After knowing the history, what are the factors that affect the pricing of the bitcoin currency? It is also important to an investor.
Factor Affecting the Price of Bitcoin
There are so many aspects that affect the pricing of the bitcoin currency. You might not notice it but when you follow the trend of trade and updates you will notice that there is a lot of math, social dynamic, economic and in co-operating technology aspects that affect it.
For you to understand the prices, you need to know that the following factors affect the pricing of the bitcoin;
- Market demand and supply
For you to master the pricing, it is crucial for you to understand the demand and supply. You must understand that as for now, the bitcoin has no physical equivalent in the real world. This means there is no real thing that it can be compared to when it comes to pricing.
With that said, the pricing will is determined by the trend of the people. If a lot of people decide to buy the bitcoin currency, the price of the currency will rise and when a lot of people decide to sell the coin, the prices will fall. A good example is when the prices went up 10 times due to Chinese buy.
- The total amount of bitcoin and the holders
The total amount of bitcoins is the number of bitcoins available. The total currently amounts to 21mln. 16 mln are available for trade while more than 14 mln are in people’s wallet.it is the statistics that has made bitcoin investors have a positive view towards bitcoins, why?
That is because people are slowly knowing about the bitcoin. With a lot of information out there, people can read and understand hat it entails and as a result, more and more people are buying hence rise in the price. This also attributes to the number of bitcoins being fixed.
- News in the media
I know it is a shocker to you, but it is a fact, human factor plays a role when it comes to how the bitcoin trade. People tend to react to the news that is trending. That, in turn, influences what the people will do next.
when it comes to bitcoin, buying and the selling are affected by what is trending. Like in the case of hacking, it saw the fall of the coin price. Also, the case of Ross Ulbricht arrest which saw the drop in the currency price by 25%.
- Technical issue
It has a lot to say on how bitcoins going to trend. Since trading of the bitcoins, an open thing and everyone can participate, it gives you as an investor an opportunity to know how the coin is fairing. It includes informing you of any technical issues that might affect you.
You having the information has its pros and cons. Like in the case when they were hacked, it caused panic in a lot of investors and that led to a lot of selling of the coin leading to the prices falling drastically.
- Political and economic event
Yes, like in the case of Chinese government embracing and deciding to buy bitcoin in massive, it saw the rise of prices to 1000%. this indeed shows how a political decision has an impact in how you will sell your coin.
If there is a global acceptance of the bitcoin currency, it ill sees the trading of the coin being stable as people ill has trust in it. that in turn, will see a rise in the prices since its demand will be high.
- High voracity
Voracity refers to the amount of risk and uncertainty in a security value. This will affect the degree of trading price variation over time. Currently, the voracity of bitcoin stands at 10%. The good thing is that it is going down hence there is hope of a better price in the future.
The future pricing of the bitcoin currency
Now that you have the information you need to have about bitcoin prices, you need to trade with caution. That is because the bitcoin trading is very uncertain and unpredictable. Anything is bound to happen any day
Like you have read, technical issue and limitations, code problems and political events have a lot to say when it comes to the price of the bitcoin currency. You need to put that in mind and always put yourself in a position to decide about your currency in the wallet in case of this events.
The good news is that investors and the crypto community at large have a positive feeling about the future of the coin. They believe the current bitcoin growth is stable and there is no reason to why people should not continue to invest in them.
Bitcoin is a young currency that is growing and trying to establish its space in the currency world. 10 years are little to judge what is going to happen. All you must do is follow the trend market, stay updated on the news and you will be able to predict and decide on when to trade.
Bitcoin, being a new currency is a topic that has been trending for long. whether you want to buy or sell your bitcoin, you need to know how the pricing goes. The current price of the bitcoin will be a deal breaker on whether it is the right time to buy or sell your bitcoin for a profit.