What determines the price of a bitcoin?

Bitcoin is nothing but a cryptocurrency which is also called as virtual currency.It is used for Peer-peer technology to facilitate instant transaction of payment.Bitcoin is still more efficient and cheaper way to transfer money. Buying a bitcoin is totally different from buying a bond or a stock. Since bitcoins are not issued by a bank or any government, the inflation rate, monetary policies and also the economic growth will not affect the tron trx. But still bitcoin prices are influenced by few factors.

Supply and demand

The bitcoin protocols allow to create a new fixed rate. Then new bitcoins are introduced to the market once the miners process the blocks of transactions. When growth becomes slow there comes the demand for bitcoins. The higher demand leads to higher pricing of bitcoins. Limited liquidity is available in market while comparing to normal currencies. A large number of new adopters are joining the market on daily basis. If the cryptocurrency has high supply but the requirement is very low then it will put down its values. Also if the supply of bitcoin is limited and the requirement is high then the price will go high.

Competition

There is no business without competition. Even bitcoins have competition. Just like bitcoins there are many other cryptocurrency available in market. The crowded field keeps the price down. So the heavy competition among the cryptocurrencies makes the price in control. But still the high visibility of bitcoin gives it an edge over its competitors.

Cost of production

Since bitcoins are virtual there is no need to produce and we will not have any cost of production.Bitcoin main relies on the complicated cryptography math that the miners will solve. The unique thing about bitcoin production is the algorithm allows only one bitcoin to be found for every 10 minutes.

Availability on currency exchange

Just like our usual currency trade, cryptocurrency investors trade cryptocurrencies over coinbase and othe exchanges.  This will be similar to traditional currency exchange. When the exchange becomes popular then it is easy to draw in additional participants. 

It is quite clear that the cryptocurrency price prediction should be taken so seriously. Prices tends to react according to any decisions regarding cryptocurrency regulations.Cryptocurrency is an alternative for fiat currency which is backed by the government. Times have changed investors lose their interest on fiat currency and they have started changing towards cryptocurrencies. There is also a belief that cryptocurrency will replace the physical gold.  Today cryptocurrency forms a major role in the process of trading, spread betting and managing risks. For more information visit #trx coin.