Are you planning to start trading Bitcoin? Then, find out how to determine the cost of buying Bitcoin.
Crypto trading is among the most lucrative ways to profit from Bitcoin. Although it works similarly to traditional stock trading, Bitcoin traders buy and sell digital assets. Cryptocurrency traders mainly leverage virtual assets’ constant price fluctuations to score marginal profits from buying and selling them on exchange platforms online.
Unlike the traditional stock markets that open and close at the end of the day, cryptocurrency traders can trade 24/7. That is one of the reasons why Bitcoin trading presents a better potential for substantial profits. Besides, Bitcoin boasts a higher market value than other digital assets and physical commodities.
Crypto exchanges such as bitcoinsprint.io are the most reliable marketplaces for buying and selling Bitcoin. They allow individuals and entities to buy Bitcoin in cash via credit cards, debit cards, and even wire transfers. Besides, some crypto exchanges also accept other cryptocurrencies for Bitcoin.
Nevertheless, Bitcoin’s high volatility means prices are never constant. Instead, they continuously fluctuate upwards and downwards based on the market conditions. The cost of one Bitcoin has moved from $3,327 in December 2018 to five figures in recent years. On the other hand, Bitcoin has also lost a lot, declining from about $45,000 in 2021 to $19,790.34 as of July 2022. That is why you must properly understand how to determine Bitcoin prices before you start trading crypto.
How to Determine Bitcoin Price
Bitcoin’s prices move up and down based on several factors. However, no single entity determines Bitcoin’s prices like in traditional assets such as fiat currencies. Instead, prices primarily fluctuate according to the supply and demand economics, or the price people are willing to pay.
Bitcoin has a fixed supply or market cap of 21 million tokens only. Miners have currently minted about 80% of the 21 million coins. Besides, new Bitcoin’s availability is also subject to halving, which cuts the miners’ rewards by half every four years. That means Bitcoin’s supply is quickly diminishing and will soon run out.
Demand depends on various factors, including industry events and new. Positive sentiments drive Bitcoin’s market demand, but negative opinions weaken investors’ confidence, impacting price declines. Meanwhile, the market demand is growing exponentially as several mainstream institutions adopt Bitcoin.
Like any free-market economy, Bitcoin’s diminishing supply and growing demand point to its expected price growth. The unique supply and demand economics allow Bitcoin to attract and retain a more substantial purchasing power over time. That is why many economists and investors are confident Bitcoin prices will soar through the roof in the future if market conditions remain constant.
Government regulations can also impact Bitcoin prices. That is because regulations threaten Bitcoin’s decentralization by imposing restrictions on its usage. Some rules may also increase the costs of transacting Bitcoin. Overall, increased regulatory pressures could make investors flee the crypto market, impacting a decline in Bitcoin prices.
Bitcoin Price Charts
Bitcoin’s high volatility makes it extremely difficult to predict the prices with the utmost accuracy. However, a few ways exist that can help you determine Bitcoin prices without stress. Crypto exchanges usually provide up-to-date Bitcoin price charts that you can use to estimate the average market price. That could enable you to calculate how much it would cost to buy Bitcoin with fiat or other cryptocurrencies.
Other exchange platforms also provide technical and analytical tools with relevant resources such as market statistics to enable traders to predict Bitcoin prices. However, the analysis may be a bit complex for beginners.
Overall, Bitcoin prices fluctuate constantly and could shift rapidly without any warning. Nevertheless, the cost of buying Bitcoin will mainly depend on the prevailing market prices and your risk tolerance.