What determines the prices of bitcoins?


Many people are using cryptocurrency to make payments and do all their trades but they do not ask themselves how the price is being set. If you are really into crypto trade, you should be curious to know how the price of bitcoins and other cryptocurrencies are arrived at. Many factors are known to influence the bitcoins price today. Here are some of the things that are known to influence the price

The liquidity

One thing for sure that determines the price of a bitcoin is the liquidity. When you are trading with bitcoins, you should always know that the price of bitcoin is always volatile. Liquidity is simply the amount of bitcoin that is out there in the market measured per time. As much as many people might have bought the bitcoin currency, it is also true that the transactions being done on a particular day let’s say a day, is always very small.  Therefore, in the market and the price, anything is bound to happen anytime. When the prices go high, that is the time that many people take advantage of and sell their bitcoins. Bitcoin profit can help you learn more about liquidity as well.

The demand and supply

The demand for bitcoins can also change its price. If many people are in demand for bitcoins, it will be very obvious that the price of the bitcoin will rise. When the supply of bitcoins is less, the price of bitcoins will be high but when the supply is high, there is a possibility that the price of the bitcoin will automatically go down. That is to say, demand and supply also affect the price of bitcoins. To take advantage of the events, you should observe the market trends and structures. To understand more about demand and supply, also find out about bitcoin profit