It has been believed that cryptocurrencies are not like digital currencies for ages, and they do not get impacted by external factors. Also, to support the statement, many people have performed experiments by moving out of factors and not having price movements in the bitcoins. However, it is very well known that everything that exists in the world will impact the external world. The same is the case with bitcoin. Therefore, it is believed that bitcoins are moved by different kinds of factors and catalysts which exist out of the bitcoin cryptocurrency atmosphere. Therefore, it is necessary to be understood if you want to get a thorough knowledge about cryptocurrencies and bitcoin trading.
The cryptocurrency market is highly uncertain, and many analysts believe that BTC is utterly impervious to shocks like the global financial market. However, the statement may not be entirely accurate. According to the analyst and cryptocurrency enthusiast, bitcoin is like an inflation hedge and can also refrain from getting affected through the uncertainty tides bitcoin-up.co. However, the recent movement in cryptocurrency prices shows otherwise. Also, according to the media, there are countless pieces of shreds of evidence that show that bitcoin and other cryptocurrencies prices are affected by the exogenous market shocks.
Along with this, other conventional functional products also affect the prices of cryptocurrencies to a large extent. Some of the international regulations in social media are an integral part of the catalysts that affect bitcoin prices and other digital tokens. Therefore, having a quick rundown on some of the critical catalysts that drive the bitcoins market.
Events in the Market
The whole world was affected last year because of the Coronavirus pandemic. The global financial markets were at considerable risk because of low investments. In March 2020, the global market was facing a considerable risk of crashing down. Along with the global markets, bitcoin was also lower during that period. It is all because it is entirely evident that the external factors also move the prices of bitcoins from bitcoin wallet and these 4 factors buyers should pay attention to. Bitcoin prices fell by 57% and went as low as $3867. However, the fact was not long-lived, just like the effects on the stock market. Right after falling drastically by 57%, the bitcoin market became even more robust, and now it has also touched the all-time highest price of $69,000 recently.
Imposing regulations on the international level on the trading of cryptocurrencies is one of the most critical factors that can affect the global digital coin market. Some companies are looking forward to making bitcoin a legal tender; however, some nations are against the same—the rules and regulations on cryptocurrency mining operations from countries like China harm bitcoin prices. When China imposed a strict ban on cryptocurrency mining and related operations, the prices of bitcoins started to decline. On the contrary, some countries also affect the prices of bitcoins positively. For example, El Salvador accepted bitcoin, and now you can use it as a legal tender in the country. It led to the increase in the prices of bitcoins, and hence, it had a positive impact.
It is not only the global rules and regulations that affect bitcoin prices to a large extent. Wall Street and other traditional financial markets of the whole world also impose pressure on the cryptocurrency world. Suppose that Wall Street is highly supportive towards bitcoin and starts to purchase bitcoin, it is going to have a positive impact on the prices of bitcoin will be likely to increase. However, if Wall Street ultimately makes a statement against bitcoins, there are chances that the prices will decline. Some of the major companies like Tesla have accepted bitcoin as legal tender in exchange for their cars, which has played a crucial role in knowing the potential of bitcoin. When the CEO of Tesla, Elon Musk, announced the removal of bitcoin payments from Tesla’s system, the price market capitalization of bitcoin fell from $2.43 trillion to $2.03 trillion.
Social media has a significant impact on the prices of cryptocurrencies and not only bitcoin. For example, when Elon Musk announced bitcoins, he was likely to accept bitcoin in one or another way. Therefore, the bitcoin retailers started to consolidate bitcoins. By doing so, they strengthened their portfolio to sell their bitcoins in the future and make huge profits. The same thing happened. After talking about bitcoin for a new show duration of time, the CEO of Tesla, Elon musk, accepted bitcoin as payment for its new cars. It led to the increase in the prices of bitcoins, and the whole bitcoin market will be vital.