World events change the course of cryptocurrencies and this is natural. Bitcoin is dozens times more expensive than any altcoins. And, since this is not just the most valuable crypto asset, but also a pioneer of the crypto industry, it would be logical to consider changes in the price on the example of this asset.
Over the ten-year history of Bitcoin, many key events have occurred that helped transform it into what it is today. Without these events, both good and bad, we would not know what our cryptocurrency industry would look like now. But, it is important to understand that not all of these incidents are directly related to cryptocurrencies, external factors also have a colossal impact.
Opponents of cryptocurrencies have been relentlessly claiming that Bitcoin is a bubble for already 10 years. But despite this, the value of BTC continues conquering new heights. Yes, there were many BTC prices ups and downs, but in every seemingly hopeless case, the price of Bitcoin was recovering and rushing to new horizons.
It is worth highlighting the main external factors that have the greatest impact on the rate of major cryptocurrencies, in particular BTC:
The rule of supply and demand – the demand for Bitcoins works on the same principle as for gold or any other valuable asset. The more new crypto investors appear on the market – the higher BTC price rate will be.
Social media impact – well-publicized cryptocurrency news can both fuel the interest of market players and attract new investors.
Hype in the masses – over its history of existence, Bitcoin has gone a long way – from an unknown digital currency to a very popular method of payment recognized nearly all over the world.
Legislative issues – today, many countries have seen the potential in Bitcoin and changed their negative attitude towards cryptocurrencies. When the United States recognized Bitcoin as a commodity, its rate increased significantly, which indicates a direct dependence of the cryptocurrencies prices on the legislation.
Market participants – major players in the crypto market, called “crypto-whales”, can cause a significant change in the value of crypto, which will be evidenced by a sharp fluctuation in the Bitcoin rate. Whales have enough assets to make large transactions. This consequently can greatly impact cryptocurrencies price on cryptocurrency platforms, which causes movement on the market. Bitcoin traders notice the change and try to catch the moment to benefit from the higher prices.
Politics – as with traditional currencies, political events, though indirectly, but still affect the exchange prices of various cryptocurrencies. However, the change in the price of Bitcoin caused by political events is usually the opposite of what happens with central bank currencies. Lack of confidence in the country’s economy makes people give a chance to cryptocurrencies and consider them as “safe heaven” to hedge their assets.
Let’s take a closer look at the politics issue. The most striking example is the country of Belarus – due to the financial crisis in the country, Belarusians created their own cryptocurrency and made it national. This of course, significantly fueled the interest of the masses in cryptocurrencies.
Returning to the situation with the United States – since Joe Biden is elected the next President of the United States – this cannot but serve as an impetus for the future course of cryptocurrencies. Historically, Democrats are optimistic about gold. It is widely believed that more fiat money is being printed under the Democratic leadership, further devaluing the dollar as a currency. These words are supported by the fact that Bitcoin (BTC) has already increased by more than 10% since election day.
Do you want to understand why the “cryptocurrency bubble” does not deflate in any way and continues not only to stay afloat, but also to constantly expand the list of followers? Then you need to carefully consider the history of the Bitcoin rate, paying special attention to the events accompanying all these fluctuations.
Let’s consider Bitcoin from the very peak of its popularity, reaching a record price in December 2017. After many positive and negative events, it was 2017 that was the breakout year for Bitcoin when it made the knight’s move. The asset showed signs of growth throughout 2017 and on December 17th reached its all-time high of over $20,000. This growth of the coin brought millions of people into the crypto world. Everyone wanted to learn more about cryptocurrencies and make money on them. The market was filled with newcomers and those who just came for profit.
A bit later, the Bitcoin price has declined significantly throughout 2018 and practically throughout 2019. Then, by September 2019, the price of Bitcoin has grown significantly, reaching over $10,000 (instead of $3,000-4,000 at the beginning of the year).
Then 2020 came and “hit with full force” on world finance and. Fortunately, Bitcoin was not affected, more precisely, it was for a short period of time, but recovered quite fast.
It’s not a secret that the times of COVID-19 have shocked the entire global economy. The world’s fiat currencies’ exchange rate has changed. Small business and private entrepreneurship are suffering, the largest companies of the countries are idling without usual workload. Talking about cryptocurrencies — the situation is different.
Why so? Everything is just elementary. The fact is that cryptocurrencies are always volatile. Consequently, sharp jumps in crypto rates are not so “critical” than in the familiar world of “paper finance”. Bitcoin is one of the most popular and relatively stable of all generally unstable alternative cryptocurrencies. BTC price has been rising and falling, like all other financial assets on the planet.
After the first reports of an increased number of patients with coronavirus in China, the price of the “first cryptocurrency asset” rose. In less than a week, the value of a coin almost doubled. And while traditional businesses were collapsing among entrepreneurs around the world, cryptocurrencies once again proved to be a good type of alternative income.
Back to the present time, the US elections and Joe Biden – how are things with Bitcoin now and what can we expect?
In mid November, the price of the main cryptocurrency surged over $18,000 — this is the maximum after the all-time-high since 2017, and most likely, it is far from the limit! What are we going to see next? Time will show, but now you know that the global events eventually affect cryptocurrency prices too.