Ever wondered how the price of Bitcoin is formed?
In addition to the dynamics of supply and demand, there are other factors that influence the value of Bitcoin.
The value of Bitcoin
We can say that the most important factor for the value of Bitcoin is the fact that more than 25 million users use and trust the cryptocurrency.
Another issue is the scarcity: we will have only 21 million bitcoins in the world, of which 18 million are already in circulation. In addition, because it is difficult and expensive to produce (or mine), Bitcoin is valued.
Bitcoin's price is not regulated by a state, central bank, mint or company. As such, it is not yet directly affected by inflation.
The Bitcoin price agreement
In each transaction, the interested parties agree to determine the selling price. This amount also varies with each payment method.
- If the purchase is directly from someone else, the buyer will agree to a price and a commission that, depending on the trust, value or form of payment, make the price cheaper or more expensive.
- If done through online P2P platforms (point-to-point), the buyer reviews the crypto sales "offers" and chooses based on the best price, payment method and the seller's reputation.
- If you trade on an exchange, the buyer can maintain almost real-time control of your purchase and choose to do so at the best possible price. You can also leave operations scheduled for when the BTC reaches the desired quote.
- And if the purchase is through a broker/exchange, the buyer will have access to the values that this platform offers, accept an extra cost in exchange for benefits such as security, simplicity and speed. Therefore, this is the most recommended way for novice users.
Hope this small begginer guide could clarify some of how it's generated!