Bitcoin has lost half its value in the recent months. It was trading at over $19,000 during the end of 2017. Today, bitcoin market price is around $6500. The investors are speculating that the price can rise any day from now. How can we know what or who influences Cryptocurrency analysts believe that they have found a way of predicting the future price of bitcoin. According to the analysts, bitcoin price may touch $36,000 by the end of the year 2019.
Predictions drawing sharp criticism
The bitcoin price right now prediction from the analysts has been receiving a sharp criticism from the cryptocurrency community. The chief strategy officer of Block stream believes that the forecast being made is based on a controversial theory. As per labor theory of value, the price of any service or good is determined by the work that is put in for producing it. This theory is immensely popular with the Marxist economists. However, this school of economics has been abandoned in favor of subjective evaluation.
Market conditions affect the price
The price of Bitcoin isn’t set by anybody. It is volatile and it is partly due to liquidity. The term liquidity refers to the amount of bitcoin which is currently available in the market in any given time. The price of bitcoin is also dependent on the news being circulated in the media or due to the government regulations. Any ban on cryptocurrency can result in a steep decline in the prices. The same thing holds true in case of any fraudulent activities. If there is any news about bitcoin being used for illegal purposes, it can result in fluctuation in the price of this digital currency.
Another factor affecting price of bitcoins is the rate at which it is being mined. Bitcoins are not evenly distributed. Bitcoin giants have hoarded a lot of coins and manipulate the market due to lack of liquidity. Large traders have the potential to drive the price by selling high volume of bitcoins in the market. The market was crashed recently by a trader name Bear whale. What is the price of bitcoin can change any time and it is clearly evident that it is based on various parameters. Bitcoin is not a risk-free asset. Even the experienced traders have to face challenges due to the volatility in the market as well as due to high unpredictability.