Cryptocurrency may be the centre of attraction at debates, news circlers and also the economy. The countries that have made it legal tend to look at the benefits and gives freedom to its people. Since laws are different at other places, such factors tend to deflect and does not affect the world’s economy. So, when you look at markets that have legalized the same, you can understand that certain factors influence the biggest form of cryptocurrency. Yes, we are talking about Bitcoin and how elements shape their ups and downs. So, to make everything clear, here are a few factors that give birth to its pros and cons.
Apart from Bitcoin, the media plays a huge role in the economy, and we are all aware of the same. Be it information or data; we have received quite a lot from our media houses. On the same manner, it influences Bitcoin by publishing their take on the same. People tend to be aware of Bitcoin, and that is the power of journalism. The types of coverages either tend to be positive as well as negative. Due to these factors, people may be either influenced to invest or not invest. When such things go further, the prices tend to take a hit and either reduces or increases.
Supply and Demand
Be it Bitcoin or goods, the market forces of supply and demand play a huge role. Both these forces affect the market, and there are different principles to the same factor. Such matters can be understood clearly when we relate them to gold. For example, a predetermined amount of gold can be compared to a predetermined amount of Bitcoin. In the same manner, the forces of supply depend upon the demand and the equation is quite similar to what you learned at school. But if economics was not your fortress, then we suggest that you do some reading.
Change that comes through laws is another common factor that affects all kinds of monetary transactions and elements. Since Bitcoin is not centralized, governments across the world are a bit desperate to do something about the same. This occurs in the form of crackdowns, and the biggest example that we can give is China. When the country ordered a crackdown on several coin exchanges, the markets of Bitcoin were affected. The amount dropped, and investors were confused about the next move.