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Bitcoin is not issued by a bank or backed by a government, therefore, inflation rates and monetary policy is not applicable in evaluating why its price goes up or down.
Traders and investors need to use fundamental analysis in order to make the best possible guess of its future price. There are many factors that can drive bitcoin price fluctuations. Here are the two main influencers:
1. Supply and Demand
Bitcoin price is dependent on the market perceived value. If more people want to buy Bitcoins, the price will increase. If more people want to sell, the price will decrease. Bitcoin has properties that make it similar to gold. Instead of government or banks, it is lead by the developers of the core technology and has a limited supply of 21 million BTC.
2. Competition
While Bitcoin is very popular, traders can choose to invest in hundreds of other cryptocurrency or “altcoins” available
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