Bitcoin has become one of the most popular cryptocurrencies on a global scale. Based on its market cap, it’s the largest one to date. Thanks to Bitcoin’s latest bull cycle, there was huge support by both businesses and retail investors looking to obtain BTC.
Like every other asset, Bitcoin is also influenced by external events on the market. Below we will cover the key events that have an impact on the price of Bitcoin.
Worldwide Events
Events that have a global impact on the stability of the financial markets also have an impact on BTC. One example would be the latest geopolitical instability between Ukraine and Russia. As the crisis deepened, the price of Bitcoin plummeted, as the price for other cryptocurrencies like Ethereum and Litecoin. During times of crisis, many users are looking to sell their assets, which means that the demand for crypto is falling. The same trend is noticeable on the stock market.
Another example would be the recession in 2008 which actually triggered the rise of Bitcoin. Cryptocurrencies, compared to fiat currencies and other assets which are under governmental control, are not directly impacted or don’t feel the same effect of worldwide events as other assets. They can bounce back quickly because they are purely impacted by the relationship between the market demand and supply, which needs to be taken into account for investors that want to purchase BTC.
Moreover, when countries expressed their support for Bitcoin, it positively impacted its price. For example, El Salvadore accepts Bitcoins as legal tender. On the other hand, when countries impose bans or prevent the adoption of crypto, that can have a negative impact on the price. In other words, events that greatly impact the market’s supply and demand will impact Bitcoin’s value.
Institutional Investors
Institutional investors have been buying BTC since the emergence of new crypto exchange platforms. They are able to buy a significant amount of BTC, more than any retail investor, and have substantial influence over BTC demand. It gives an opportunity for institutional investors to own Bitcoin without worrying about the security aspects of storing it. Actually, the latest bull cycle was able to last for so long due to the involvement of institutional investors like the Grayscale Bitcoin Trust.
Support by Influencers
Influencers and celebrities supporting BTC had a noticeable impact on its price. Not only does it enhance Bitcoin’s visibility, but also it boosts Bitcoin’s demand. One example would be Elon Musk, whose tweets had almost an immediate influence on Bitcoin’s position in the market. Namely, when Tesla invested $1.5 billion in BTC, it affected Bitcoin’s price as it rose to over $60,000.
Also, there are other celebrities that have expressed their opinions on Bitcoin and had more or less impact on its trajectory. Some mainstream celebrities that have invested in BTC or supported it are Maisie Williams, Snoop Dogg, Michelle Phan, and many others.
Bitcoin Mining
Bitcoin mining is a crucial aspect of Bitcoin’s ecosystem, and thanks to Bitcoin’s popularity and competition in the blockchain network, there is a rise in costs associated with the mining process. A lot of criticize Bitcoin’s mining for its contribution to global warming due to its time-consuming as well as energy-intensive operations. But the good news is there is the rise of renewable energy sources on the market that can be utilized for mining.
Final Thoughts
When it comes to the competition in the market and the popularity of competitors like Ethereum, Litecoin, Dogecoin, BTC still remains the largest cryptocurrency based on its market cap. Although we don’t know what the future will bring, we can safely say that Bitcoin will remain a significant aspect of the crypto market. Also, as the crypto market experiences a dip and Bitcoin price is low, now it’s a good time to invest in BTC before its next bull run.