Why Bitcoin Keeps Rising
Introduction:
In this article, we will look at the factors that drive the growth of Bitcoin. We will analyze both fundamental and technical factors affecting its price.
Fundamental factors:
1. Supply reduction:
The supply of Bitcoin is reduced due to halving, which occurs every 4 years.
Halving reduces the number of Bitcoins that miners receive per block.
This leads to a deflationary effect, which can lead to price appreciation.
2. Increased demand:
The demand for Bitcoin from institutional investors is increasing.
Investment companies, hedge funds, and other institutional players are starting to consider Bitcoin as an asset for investment.
This can lead to a significant increase in demand and price.
3. Bitcoin adoption:
More and more companies and organizations are starting to accept Bitcoin as payment.
This increases the utility of Bitcoin and can lead to its wider adoption.
The more people use Bitcoin, the higher its price can be.
4. Inflation:
Inflation is rising in many countries around the world.
Inflation devalues fiat currencies such as the US dollar.
Bitcoin can be seen as a hedge against inflation.
This can lead to increased demand for Bitcoin and its price.
5. Geopolitical instability:
Geopolitical instability, such as the war in Ukraine, can lead to increased demand for Bitcoin.
Bitcoin can be seen as a safe haven asset in times of turmoil.
This can lead to increased demand for Bitcoin and its price.
Technical factors:
Decreased volatility:
Bitcoin's volatility has been decreasing over time.
This makes it more attractive to institutional investors and other risk-averse investors.
Lower volatility can lead to higher prices.
