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Find Out How to Determine Bitcoin Price More-or-Less Accurately

Learn How to Determine Bitcoin Price (If It Is Possible)

Written by Ethan Goldenberg

Financial expert @ Global Asset Finance Limited, 10+ years in the finance and cryptocurrency market

What is the price of bitcoin today? This question prevents many people from sleeping well. After Tesla invested $1.5 billion in Nakamoto's revolutionary project, the value of a single coin grew over 50,000 dollars - the highest point in its history. You’ll never know for sure how far it may go. A single Facebook post from a public figure can change attitudes towards bitcoins and other cryptocurrencies in a blink of an eye.

Bitcoin has been swinging wildly since the beginning of COVID-19 pandemic. The price of the world’s number one cryptocurrency has dropped to ten-month lows just to rebound sharply by the end of 2020. The oldest crypto managed to survive the difficult times. The digital currency market is highly volatile, but, as the number of bitcoins is limited and many public figures support it, it will reach the peak sooner or later, so it is the right time to purchase this cryptocurrency. The question is how to predict the price and if it is possible at all?


It appeared that Bitcoin’s price barely achieved 6,000 dollars in 2020, but we all know that it costs more than $50,000 now. So, can you feel the growth in less than a year? It is amazing. However, it is not possible to fully predict the further scenario development. What you should do if you are really interested in this topic is to watch out for the signs of further volatility and listen to expert opinion instead of relying on Elon Musk’s posts alone. So, how is the price of Bitcoin determined nowadays?

What Determines the Price of Bitcoin?

Though 100% accurate Bitcoin price prediction is not possible, you can see the factors that impact the fee per coin. Just like with any other asset, it is supply and demand. However, the general approach to defining the price of Bitcoin is slightly different than of a product that you buy in a grocery store. Even if you possess certain experience investing in stocks, bonds, and securities, you should still realize that it is different from trading cryptocurrencies.

“I would like to remind you that Bitcoin is not issued by a central bank. It is not backed by a government. Typical economic factors that influence the dollar or euro rate do not work here. On one side, that is great as no inflation rates can cause changes in Bitcoin price. On the other side, you should be aware of other things that can either boost or decrease the rate of crypto.”

Even if you know them, it is not the guarantee that you can forecast the price fluctuations for sure. Still, this knowledge matters for crypto investors and traders. Trading in real-time involves both in-depth analysis of the previous results and your best guess. Intuition alone won’t help, so consider the following indicators of Bitcoin rate:

  • The number of rivals (a bit more than 4,000 cryptocurrencies were established as of January 2021);
  • Supply/Demand;
  • The production fee during mining;
  • The exchange services that trade the coin;
  • The rewards established for crypto miners for adding new blocks to the blockchain;
  • Regulations on its sale;
  • The internal governance.

Yep, Satoshi Nakamoto, the founder of Bictoin, still has some power over its “child.” However, no physical face or organization sets the price. It is decided by the market. The good thing is that the amount of bitcoins is limited unlike in case with its primary competitors, Ethereum and Litecoin. It means that as the number of coins goes down, the fee goes up. The question is how far it may go.

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On the whole, a hard capitalization of 21 million bitcoins can be mined, and there will be no additionally issued coins. It might happen in a hundred years (experts name 2140 as the possible date). After that, no one will get block rewards any more. By March 2021, the all-time high fee per one Bitcoin is approximately 61,684 dollars. After the threshold of $50,000, it does not seem to fall much. That is not the limit for Bitcoin price USD.

You should also keep in mind that different exchange services have their own rates and commissions, so the price of 1 Bitcoin may vary from place to place. The highest fees are set up by the Bitcoin ATMs that function just as regular cash ATMs.

Remember: A lot depends on the quantity of Bitcoins that flow through the market. The more items market players trade, the more challenging it is to shift the price. However, trading volumes of any crypto are still way lower than of fiat currencies.

What in the World Can Change Bitcoin Price Today?

At Eclipcoin, for instance, you can get the best BTC to USD rate. The fee might look a bit higher than the market average, but you save plenty of money on Bitcoin exchange rate. Besides, it is a safe and user-friendly platform.

No matter what you decide, keep in mind that the crypto market is impacted by various events. The BTC price can drop significantly in case the local government has no idea what to do and how to react to Bitcoin. The thing happened in China, for example.

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It only seems that nothing can change Bitcoin price except for the factors mentioned above. In fact, a single publication in the media can influence the demand for this cryptocurrency. Because of the liquidity, people can easily manipulate the crypto market, especially those who hold most of the coins. For instance, if an influential trader decides to sell off digital currencies below the actual market value in high volume, the price will fall fast.

Verdict

So, how is Bitcoin price determined? There is nothing else to recommend except for developing your own strategy after trying several approaches or combinations of them. You can only rely on the relevance of analytical forecasts, media activity, and your best guess. Though Bitcoin is a high-risk asset, I believe that its price will not drop dramatically in the near future. I have listed enough reasons for that. You can recall them in this post. Volatility means higher income in case of success, and Eclipcoin and world’s financial experts firmly believe that Bitcoin is one of the most prospective assets nowadays.





















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Please note: purchasing or selling Cryptocurrency carry significant risk. Prices can fluctuate at any time.
Because of such fluctuations, Cryptocurrency may gain or lose value. This is your responsibility on how to handle your own assets.