At the beginning of 2021, many people made money off of cryptocurrency, Bitcoin in particular. The price of the currency rose drastically to around $65,000. This also affected other coins as they all surged when Bitcoin rose. However, there was a considerable dip in the crypto market. The huge was so huge that about 50% of bitcoin was lost to the market as Bitcoin came down to about $36,000.
Bitcoin has made money for people in two different ways; it has made money for investors who have held the coin with the hope that the coin would surge. For instance, when the coin was $36,000, if a person had both $100 worth of bitcoin, now that the coin is currently $44,000, the person would have made some profit. Also, many people trade daily with the coin to make profits. It is now more accessible when the trader uses trading bots to make a profit. All they need to do is to give trading orders to the bots. For instance, you can trade with the Quantum AI, Bitcoin Profit, and many other trading bots to make a profit with little work.
Of recent, bitcoin has risen again, and it is enjoying a bullish season as the coin prices are surging up. As of today, bitcoin is around forty-four thousand dollars. Many people will then be wondering why the crypto market is so volatile, and the new surge in bitcoin price is confusing many people. However, there are reasons why the price of Bitcoin just surged, and the following are some of the reasons.
MEANS OF PAYMENT
The more bitcoin is accepted, the more it is circulation, and the more the price surges. Earlier in March 2021, Tesla Inc accepted Bitcoin as a means of payment. It was this time that the price of Bitcoin rose to around $65,000. Also, when the price of Bitcoin went down, PayPal released a note that it would soon start allowing payment to be made via Bitcoin and many other cryptocurrencies. PayPal, for instance, has a lot of people that use the platform to pay. Also, PayPal is associated with Venmo, another platform that has many people using it. So such statement by PayPal made a surge in the price of Bitcoin.
It is not only Tesla, PayPal, or Venmo involved in Bitcoin and cryptocurrency; platforms such as CashApp also allow its users to perform transactions with Bitcoin and Cryptocurrency. The adoption of Bitcoin as a means of is a crucial reason why Bitcoin rises in price.
PRODUCTION
The rise in the cost of the production of Bitcoin is also another reason why Bitcoin rises. The total amount of Bitcoin that can be created is 21 million Bitcoin. The more Bitcoin in circulation, the harder it gets for it to be made. Bitcoins are mined, and the more it is mined, the more difficult it is to mine. This surges the prices of Bitcoin because, as producing becomes difficult, it increases the marginal cost to produce the coin. Hence, the price of the coin increases.
RESISTANCE
This is another reason why Bitcoin will always rise. Ever since the inception of Bitcoin, it has always had this resistance. This means that when it backs down a bit, there always comes a bullish market afterwards. For instance, in 2019, the price of bitcoin surged to $14,000 in June. After, the price was reduced to $3,800. However, in October, the resistance came, and the price surged through to $20,000. Also, what we are experiencing now is that the cost of Bitcoin reduced to $33,000 from $65,000. As of now, the price of bitcoin has increased to $44,000. This resistance makes investors think that whenever bitcoin goes down, it would always come right back up. Hence, they pump their money into Bitcoin whenever the coin goes down and anticipate a bullish market. This, in turn, increases the price of bitcoin.
CONCLUSION
There are many reasons why Bitcoin keeps pumping. People keep rushing to the market, and the more people rush to the market, the more money to go around. When Tesla pumped billions of dollars into Bitcoin, the coin reached its highest point ever. Many factors like this make people continue to put their money in the market, and the more people enter the market, the more the price of the cook increase.
