Today's Bitcoin Price: BTC / USD
The Bitcoin Price Deconstructed
Discover the Factors to Predict the Future Price of Bitcoin
The Bitcoin price has traded over a wide range during the 9 years since the cryptocurrency has been in existence. Because Bitcoin is not controlled by government run central banks, the price is influenced by a number of factors and events, unique to the bitcoin bitcoin technology and community. So, in addition to understanding how to read a bitcoin chart you must also stay abreast of the events that take place in the bitcoin ecosystem and the broader cryptosphere (which includes all other alternative cryptocurrencies, sometimes collectively known as altcoins).
Once you become familiar with these skills, not only will you be better at predicting the price of bitcoin and determining good times to buy or sell bitcoin, but you will also be better at at evaluating other investment opportunities in currencies such as Ethereum, Ripple, Litecoin or CryptoBoost Bitcoins.
What is the Bitcoin Stock Price?
Some people have made the mistake of thinking that bitcoin is a stock in a company, and search for the bitcoin stock price. Bitcoin is not a stock, but a cryptocurrency so it is not traded on stock exchanges, but on cryptocurrency exchanges such as bitfinex.com.
This 3 page article gives you the background necessary to understand some of the things which effect the price of bitcoin. Using this information you may be able to find investments that have the potential to yield up to 3,500% (or more) in as little as 6 months (or less). See the image below.
Determining the Factors Affecting the Bitcoin Price
The price of anything is based on supply and demand. In practical trading terms, the supply in the market are the number of coins offered and the prices they are offered at. The demand are the number of bids and the prices attached to those bids. Here is a recent Order Book from the cryptocurrency exchange bittrex. It shows the Bids, what people are willing to pay in USD for bitcoins, and it shows the Asks, what people are willing to sell their bitcoins for.
The most liquid bitcoin trading markets where you can buy and sell bitcoins (and other cryptocurrencies) are called cryptocurrency exchanges. As you can see from the chart below, bitfinex has the top volume of bitcoin exchanges.
So ultimately, the price is determined nothing more than the last price that Bitcoins were bought an sold at in a given market. The real question is, where is the price going? What is the price trend: up, down, or sideways in a range? These are not simple questions to answer in any market, as there are many things that influence buying decisions of players in the market.
The Psychology Behind Bitcoin’s Price and Adoption
Before getting into the critical events that marked the history of the Bitcoin price, I want to discuss a few general concepts that answer the question: why is bitcoin valuable in general?
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Events in Bitcoin’s History and the Growth in the Price of Bitcoin
Now that we know something of the psychology involved in the growth of Bitcoin’s adoption. Let’s look at some of the events that effected the price over the last 9 years. Here are a few highlight of the events that have affected the price of bitcoin in the past. You can see the full bitcoin historical timeline here.
The Bitcoin Genesis Block Mined: January 3, 2009.
The first Bitcoin genesis block is mined, creating the first bitcoins in existence on the blockchain. To validate that date of mining the title from an article from January 3, edition of The Times is written into the Bitcoin source code: "Chancellor on Brink of Second Bailout for Banks." No recorded trades using fiat currency available.
New Liberty Standard Quotes First Bitcoin USD Rate: October 5, 2009.
Nine months later, the New Liberty Standard website creates a market to buy and sell bitcoins. The first BTC/USD exchange rate is 1,309.03 Bitcoins to one U.S. Dollar based on the cost of electricity needed to mine the cryptocurrency.
First Documented Bitcoin USD Trade Occurs: October 12, 2009
NewLibertyStandard (aka Martti Malmi) buys 5,050 BTC from Sirius for $5.02 USD (about $0.01 cents per Bitcoin). They used PayPal to complete the transaction. Here's the tweet. And you can see the transaction on the blockchain to this day.
Bitcoin's Price Reaches $1.00 USD: February 9, 2011
After being live for two years, Bitcoin’s price reaches one U.S. Dollar on the Mt. Gox exchange. News outlets feature stories on the event, causing such a surge in demand that the official Bitcoin website goes down.
Wordpress Website Begins Accepting Bitcoin: November 15, 2012
Wordpress announces its decision to begin accepting Bitcoin: “PayPal blocks access from over 60 countries ... we don’t think an individual blogger from Haiti, Ethiopia, or Kenya should have diminished access to the blogosphere because of payment issues. Our goal is to enable people, not block them.” Wordpress's move paves the way for other retailers to begin accepting Bitcoin.
Bitcoin price: $11.04
Cyprus Bank Account Levy Announced: March 25, 2013
A Cyprus Government bailout of €10 billion bailout is announced as a solution to the deppressed Cyprus economy. A levy is collected from bank accounts containing €100,000 or more. Many of these account holders begin buying bitcoin, causing a price rally to over $260.
Bitcoin's Price: $74.02
Bitcoin's Price 10 days later: $131.07
Increased Trading Volume Breaks Mt. Gox: April 10, 2013
The influx of new accounts as a result of the Cyprus bailout announcement increases the load on mtgox.com causing trading errors. Panic selling then begins, driving the price down dramaticall, only to recover a few days later. Bitcoin's Price: $181.66 USD
Bitcoin Reaches $1,242 USD on mtgox.com: November 29, 2013
Steady buying from Chinese investors creates an extended rally in bitcoin's price. Chinese citizens reputedly discover Bitcoin's ability to moves funds easily and avoid the inflation of the Renminbi.
Bitcoin Price: $1132.26
Bitcoin price breaks $1000 for the first time in 3 years: January 3, 2017
After rallying for most of the second half of 2016 Bitcoin breaches the $1000 mark for the first time in 3 years. Mass media coverage brings in an influx of new users that supposedly will raise the price even higher.
Bitcoin price: $1020.47
Bitcoin Reaches All Time High of $3000 USD: Jun 11, 2017
The Bitcoin Price Index (BPI) goes over $3,000 for the first time. Analysts claim legalization by Japan, and buying in other Asian countries such as South Korea as the cause. Altcoins such as Ethereum, Ripple and Litecoin also see breathtaking increases. Ethereum also goes to new all-time high of more than $300 USD as well.
Bitcoin Price: $3000.00
So Where is the Bitcoin Price Headed Next?
Bitcoin's price changes on a daily basis. Many factors go into determining the bitcoin price. The video below covers how the price of bitcoin is determined. Andreas Antonopolous discusses what you need to know to help predict the bitcoin price.
Current Events Affecting the Future Bitcoin Price
Due to the large volume of transactions that have accompany the growth of the Bitcoin network, the confirmation times have increased considerably. The miner’s who confirm transactions on the network have implemented a tiered fee structure in order to prioritize transactions that they process. This has led to complaints that Bitcoin is no longer fulfilling its mission to provide fast, ultra low cost, borderless transactions.
These same miner’s have stalled in implementing a fix for the problem known as SegWit (for Segregated Witness) for a variety of reasons mainly regarding their profit margins. As of the publishing of this article, July 29, 2017, the word is that a majority of the miner’s on the Bitcoin network have signalled for the upgrade now. This has resulted in a renewed surge in buying interesting as the price approached, but didn’t make all times highs on exchanges.
The South Korean government also announced last week, that they will treat Bitcoin as a legal currency. Good news for bitcoin traders and exchanges there and worldwide, as new invesment may be brought in there as a result.
Eccentric technology figure, John McAfee, recently made a price prediction for bitcoin at $500,000 in the next three years. And he is willing to put his money, and something else as well, where his mouth is. Promising to “Eat his own d*ck” on live tv if he is wrong. (As you can see, the story of Bitcoin is not over yet.)
So as you can see, the story of Bitcoin is not over yet ...