Bitcoin price (BTC)

There isn't just one reason that influences the long-term Bitcoin price; rather, it's a combination of various elements, which we will discuss below. We will list different influencing factors and summarize various perspectives for you. We hope that after this, you will gain a more objective view of the crypto market and thus be more successful in your market activities.

First and foremost, there are the so-called "Early Adopters," who are the early users of Bitcoin and other coins, typically buying in at low prices before everyone else. In Bitcoin's case, these early adopters were those in the Cypherpunk scene who wanted to support the Bitcoin philosophy. The intentions of this group of investors were not to speculate on rising prices.
There are different types of investors who invest at different times for various reasons. All investments carry a certain level of risk, which is inherent in financial markets. The higher the return, the higher the risk. A simple example is the difference in returns between German and Greek government bonds for the same investment.
Below, we break down the different investor groups for you:

Early Adopters

• The Early Adopters, mainly outside the financial industry, were the "Cypherpunks."

• Technology fans, not price speculators

• Active participants in projects

• High risk for outsiders of the industry who do not understand the technology or cannot analyze it themselves

• Calculable risk for insiders who understand the technology or actively participate

Smart Money

• The best-informed people from the financial industry or entrepreneurs not necessarily involved in crypto

• Smart people and companies with enough capital to make risky investments

• Manage both external capital and their own capital

• Keyword: Venture Capital

• Usually invest after thorough analysis and can be used as early indicators when they support certain projects

• Risk-taking investors

Institutional Investors

• Large financial institutions

• Bring a lot of purchasing power as they manage a lot of external capital

• Are later than the Venture Capital guys but have more capital to invest

• Risk-averse investors

Retail Investors

• Invest their own money

• Usually signal the peak/high and provide a good sell signal. If your hairdresser is already talking about it, there are no more buyers.

• Mostly invest after the news has reported on it

After addressing the first question of who invests, we now come to how the price is determined. We will look at the theory of supply and demand. Everything is relative.

Supply: There is a Bitcoin cap of 21 million BTCs, but no upper limit on the money supply, called M0, which the FED and ECB have increased through Quantitative Easing since 2008. With higher supply, the price falls. In this case, the Euro and Dollar depreciated against gold, Bitcoin, etc.

Demand: Of course, there also needs to be a demand side to sell something in the markets. If there is no seller at price-X, the price continues to rise until a buyer is found. The demand for fiat currencies went down after the QE measures, and those who recognized the devaluation of money early on stocked up on "inflation hedges" like gold or BTC.

Bitcoin Tokenomics:

• Maximum supply: 21,000,000 BTC

• Circulating supply: 19,719,375 BTC (as of July 2024)

Dollar Tokenomics:

• Maximum supply: ∞

• Circulating supply: $5,725,300,000,000 (5.8 trillion) (as of July 2024)

• Circulating supply: $847,000,000,000 (847 billion in 2008)

The M0 of the FED, the US central bank, had already doubled by the end of 2008! Such a massive increase in the money supply had never been seen before! The situation is similar with the Euro, but investors from the US$-Zone have a much greater impact on the markets than the Eurozone.

We took the tokenomics of the Dollar as the best example of inflationary currencies. In this context, we continue, as when the banks were bailed out with taxpayer money or newly-printed fiat currencies in 2008, there was a negative interest rate policy by the Western central banks until mid-2021.
This changed in 2021 when the FOMC (Federal Open Market Committee) released the so-called "Dot Plots," which showed the first signs of an end to the zero interest rate policy. The markets reacted swiftly because this meant that many institutional investors had to lower their risk appetite as the price for money became more expensive (=interest rates increased).

Legal Factors

How many times have we heard that Bitcoin was banned in China? This has always caused a small dip, where most "buy-the-dip" strategists would buy in again. But can Bitcoin really be banned? No, only the mining. This only means that the supply side falls short, which can also lead to rising prices.
Thus, legal factors do not play a decisive role in price formation, just FUD (Fear, Uncertainty, and Doubt).

Public Opinion

Public opinion is actually only relevant for retail investors, who, overall, do not bring much purchasing power or do not want to risk much.

Market Sentiment

Market sentiment generally describes the mood of all market participants. If they are optimistic, prices usually rise, and vice versa, when sentiment is negative, prices generally fall. This is usually not based on logic but can be influenced by FUD, stagnating prices, etc.

In recent years, Bitcoin gained more and more publicity. There was a transition from an incredibly nerdy niche to a technological phenomenon. Retailers began using Bitcoin, magazines became interested in blockchain technology and the first cryptocurrency brokers began to emerge (with, of course, Anycoin Direct in 2013). The year 2013 can be termed as the coin's breakthrough year. At the beginning of 2013, the price of one Bitcoin was $22. By the end of 2013, Bitcoin was worth $1,000 dollars. Back then, of course, this was incredible, but today you would dream of being able to buy a Bitcoin for $1,000 dollars.

Unfortunately, the Bitcoin price was hit hard by the bankruptcy of Mt. Gox in 2014. Mt. Gox was the largest Bitcoin exchange at the time. So what had happened? The exchange, originally known for Magic the Gathering cards, was hacked and about 850,000 bitcoins were stolen (worth billions of euros today). As you can imagine, the impact of this event was enormous. This event caused a wave of hacks targeting crypto exchange companies. As a result, confidence in cryptocurrencies decreased, so did the price of Bitcoin. Following these events, the price fell 32% in February. As a result, the price retreated to a value of $300 in January 2015. It took a while for Bitcoin to recover.

In 2017, the Bitcoin price reached its (then) record high. In early 2017, Bitcoin was worth $1,000, a milestone for the crypto world. More merchants began accepting Bitcoin as a means of payment, giving Bitcoin more attention. This was the beginning of an insanely eventful year. Not only was Bitcoin poised for a rocket launch, the entire crypto market was gaining tremendous attention. Once the ball started rolling, there was no stopping it. More and more people wanted to participate in the hype resulting in growing demand. Bitcoin's growth made the eight o'clock news. Bitcoin was becoming mainstream. The result? A new all-time high of the BTC exchange rate of $20,000. This was the first moment of contact with Bitcoin or other cryptocurrencies for most people.

After that huge amount of interest, the hype became too much. After the price began to drop, people became afraid. A snowball effect occurred and the price dropped dramatically. The bear market had officially begun. By November 2018, the price had dropped from $20,000 to $4,000. Interest rates had also fallen because so many people were suffering losses. It took a while, but by the summer of 2019, the price had crept back to $10,000. In March 2020, there was another big dip that brought the price down to $5,000. Now you can see why Bitcoin has been called "extremely volatile" on several occasions. In the fall of 2020 was a resurgence that threatened to push the price up to $17,000, with a high of $20,000. Of course it just depends on how you look at it, are you looking at volatility over 1 year? Then you can call Bitcoin very volatile. If you look at the longer term of the past 10 years, then you will see why some people see Bitcoin as a rocket to the moon.

After two relatively quiet years, the entire crypto market experienced a rebound, and it started (again) with Bitcoin. In the month of November, the number one spot climbed from 14k to 20k. After two years of calm, in one exciting November month the old record of 2017 was broken. A new ATH was set. The months of December and the beginning of 2021 were nothing short of amazing for the Bitcoin and crypto community. 25k, 30k, 40k, 70k, record after record was broken.

A bear market is a period of falling stock prices, usually lasting longer than two months. In the case of the Bitcoin exchange rate, this has had a major impact on its price. Bitcoin is a decentralized digital asset that uses blockchain technology to facilitate payments and transactions without the need for intermediaries or banks. The Bitcoin price is based in part on its utility as an alternative currency and its ability to store large amounts of value securely with minimal transaction costs.

The average duration of a bear market can range from a few weeks to several months. Although there is no predetermined amount of time for how long a bear market will last, they are usually shorter than bull markets, which can last up to several years.

When the price of Bitcoin enters a bear market, it can have a dramatic effect on the Bitcoin price because of traders' prediction and sentiment about future price movements. The cause of this could be due to a financial crisis, for example. During these periods, the Bitcoin price usually experiences high volatility, with sharp price declines.

However, the Bitcoin price can be affected by many factors other than a bear market. These include news events, changes in the Bitcoin network and technological advances, as well as investor sentiment. Bitcoin investors should pay close attention to these factors when trying to make predictions about the future price of Bitcoin. In addition, it is important for Bitcoin traders to understand how bear markets affect the Bitcoin price and take steps to protect their investments during these periods of increased volatility. By understanding how a bear market works and what strategies are available during these periods, Bitcoin traders can minimize their losses while maximizing potential profits.

A bear market is a period characterized by falling prices and investor distrust. Bitcoin, like other markets, follows the trends of a bear market when the price of Bitcoin price drops below trend lines or shows signs of prolonged declines. The responsiveness of Bitcoin price to a bear market can be seen in its volatile nature with sharp price declines within short time frames. During these periods, Bitcoin investors are more likely to sell their coins and take profits as they expect further losses or stagnation in value. This cycle creates an environment where the Bitcoin price moves lower than average until confidence is restored by buying activity or news developments.

The demise of Terra Luna Classic (LUNC) was another significant event in the cryptocurrency world. LUNC ran into trouble when its creators began struggling to maintain control of the stable coin and keep up with the increasing demand for it. As too much of Luna was created, it brought the Terra coin out of balance.

The result was a dramatic drop in LUNC's market value, leading to its eventual collapse. To protect investors, many exchanges chose to remove LUNC from their platforms and require users who still owned coins to convert them to another currency before they could be traded. Despite these efforts, many investors lost money due to the large losses associated with holding on to their LUNC investments.

The collapse of Luna Classic had a ripple effect throughout the cryptocurrency sector, with many other coins also experiencing losses in value and market cap. The BTC exchange rate was not immune to this downturn either, as its price fell significantly in the aftermath of the LUNC crash. For example, the price of Bitcoin fell from €28,000 euros to €18,000 euros Many investors were understandably reluctant to invest in digital assets after such a significant loss, so the price of Bitcoin BTC remained low for some time afterwards. However, the Luna team did manage to release a replacement coin Luna 2.0. Thus, the new coins were distributed to the then Luna Classic holders to compensate them.

Over time, however, Bitcoin BTC managed to partially recover and regain much of its pre-crash value. Thus, Bitcoin's price reached €24,000. The coin's resilience can be partly attributed to the fact that it is the largest cryptocurrency by market capitalization and widely accepted as a store of value. However, a drop in value soon followed due to rising inflation worldwide.

The crypto market received a major shock recently when FTX (one of the leading Bitcoin BTC exchanges) went bankrupt and closed its doors. This news came as a surprise to many Bitcoin investors who had entrusted the company with their money. The fall of FTX highlights the fluctuation of Bitcoin, and serves as an important reminder for all Bitcoin investors to be aware of the risks involved in trading crypto.

FTX was founded in 2017 by Sam Bankman-Fried, a former employee at Goldman Sachs. The company quickly grew into one of the largest Bitcoin exchanges in the world, offering users access to more than 140 different digital currencies and coins, making it one of the most popular among traders. With strong backing from Goldman Sachs and other major players in the crypto space, FTX was seen as a reliable exchange by many. The company also had a robust platform with features such as margin trading and derivatives, allowing traders to maximize their returns on their investments.

FTX had become one of the most admired exchange in the world, with a daily volume of more than $3 billion per day at its peak. Its popularity among cryptocurrency enthusiasts was driven by its low fees and excellent customer service. However, despite its popularity among traders, recent reports suggest that FTX struggled to stay afloat due to financial mismanagement and a lack of liquidity.

The sudden closure of FTX has put Bitcoin investors in a difficult position, as the company held tens of millions of dollars of Bitcoin BTC for its clients. Although some Bitcoin holders were able to withdraw their funds before the exchange closed, many others are figuring out what happened and how to retrieve their funds. The situation is still unfolding.

The Bitcoin price reacted to the FTX crash for a number of reasons. First, the FTX crash led to a sell-off of assets in the cryptocurrency market, which caused downward pressure on prices. Second, the crash also caused confusion and uncertainty about the future of the cryptocurrency market, which led to further sell-offs. Finally, the FTX exchange is one of the largest and most popular exchanges in the world, so the problems had a negative efect on the entire market. All these factors combined caused the Bitcoin price to fall in response to the FTX crash.

In the aftermath of Sam Bankman-fried's FTX-other companies have fallen over. Among them is Circle, a crypto startup once valued at $3 billion. The company has now been sold for just $60 million. Circle was founded in 2013 with the goal of making it easy for people to use cryptocurrencies. However, the company has struggled to find a way to make money and has been hit hard by the bear market. Another company that has been hit by FTX is Binance. The world's largest cryptocurrency exchange was forced to suspend trading for two hours after a sudden sell-off. This also had an impact on the Bitcoin price, causing it to continue to fall to the €15,000 mark for even longer.

Bitcoin halving is an event that occurs about every four years and marks an important step in Bitcoin's evolution. Every 210,000 blocks mined on Bitcoin's blockchain, or about every four years, while Bitcoin currently sees about 1,800 new blocks every day, the reward for miners who successfully mine new Bitcoin halves. This halving reduces the number of Bitcoins coming into circulation and can have a dramatic effect on the current Bitcoin price as demand exceeds supply.

The halving of Bitcoin took place in April 2024, and it is expected to have an even greater impact on the price of Bitcoin than previous halves. As more investors become interested in Bitcoin and the Bitcoin price is also more likely to rise in the future, the demand and thus the price of Bitcoin is likely to increase dramatically. The Bitcoin halving has already created a lot of hype around Bitcoin, as many believe it will cause a bull run reminiscent of the 2017 surge. This increased demand should increase the price of Bitcoin, but also increase transaction costs, as miners will be incentivized to prioritize higher-cost Bitcoin transactions.

The halving of Bitcoin could have a very significant effect on the Bitcoin market and its prices. If the supply of Bitcoin decreases and demand increases, we could see the Bitcoin price reach new record highs. This could create an investment opportunity for those who are able to capitalize on it in a timely manner. Moreover, Bitcoin could become even more attractive to investors looking for long-term appreciation as new Bitcoin does not enter into circulation in large numbers and scarcity increases. In the short term, the halving has had little impact on the Bitcoin price. But only time will tell what effects this event will really have on the prices and market movement of the Bitcoin price. We can only speculate on what the halving of Bitcoin will do to the price and the Bitcoin market, but it is certain that it will cause some major impact at the Bitcoin price.

On Jan. 10, 2024, the U.S. Securities and Exchange Commission (SEC) gave the green light to 11 different spot Bitcoin ETFs, including those from BlackRock, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, and WisdomTree. This approval has had a major impact on Bitcoin's accessibility to the average investor. Through a Bitcoin Spot ETF, investors can now invest in cryptocurrency indirectly, without the need to buy, store, or secure the coins themselves. This makes the process of investing in Bitcoin much easier and more attractive to a wider audience.

So far, Bitcoin ETFs have proven to be a great success. In the first three months after SEC approval, BlackRock and Fidelity's Bitcoin index funds saw $15.5 billion and $8.2 billion in net inflows, respectively. BlackRock, the market leader, currently manages BTC worth $18.6 billion, while Grayscale still owns $16.9 billion in BTC. U.S. Bitcoin ETFs now own a total of 865,000 Bitcoin, which is about 4.4 percent of the total amount of BTC in circulation. This has contributed to a rise in the Bitcoin exchange rate, which has even reached a new all-time high. This success highlights the growing acceptance and legitimacy of Bitcoin as an investment product in the traditional financial world.

But what can we expect from the Bitcoin price in the future. Through Bitcoin price analysis, one can recognize price trends and market patterns to better invest. Therefore, while no one knows how much Bitcoin will be worth in the future, one should always take these predictions with a grain of salt. In addition, the latest Bitcoin news help keep abreast of developments that may affect the current Bitcoin exchange rate. In addition, it is also important to keep an eye on the current Bitcoin exchange rate. We have a Bitcoin price prediction written based on algorithms that analyzed the historical Bitcoin price.