Factors that Influence the Value of Bitcoin
The following are the factors that influence the value of Bitcoin:
- Demand: The increasing demand day by day is leading to appreciation in the value of bitcoin.
- Supply: The supply is reducing every second due to increased difficulty in mining that goes up and up. There can only be 21 million coins ever, out of which a large portion is lost already that can’t be recovered.
- Awareness: More and more people are getting aware about it, they wan’t their bit of the coins too.
- Digital Growth: More and more users of internet will demand more coins.
- Halving: The block reward that a miner gets for mining eventually get half after reaching a particular level. At present it is 25 coins per 10 minutes (approx) that is going to be half by July 22, 2016.
- Electricity: Mining has a variable cost in form of electricity that goes high and high. So more cost means more value for the bitcoin.
- Complex Hardware: Now it is a big game that needs a complex and specialized hardware called ASIC Miner. It is produced in very less quantity, the best in the class is AntMiner S9 that got sold out in 2 minutes at the launch early this June.
- Competition: More and more people are getting into mining that increase the difficulty thereby taking the value higher.
- Hoarding: The supply is controlled by large players like what happens in Diamond. They have the holding capacity for years, so scarcity leads to more value.
- Up Trends: Appreciation leads to more demand as people think it will go up and will continue to go up.
I have mentioned all the factors, if you can add up more, please mention in comments.