Bitcoin has come a long way since its inception in 2009. From being worth less than a penny initially, it has seen massive growth over the years with some dramatic ups and downs. Today, Bitcoin is emerging as a major alternative asset class and its future valuation prospects remain optimistic.
This comprehensive guide takes a data-driven approach to analyze factors affecting Bitcoin prices and makes educated projections about its potential highs and lows in the short, medium and long-term timeframes. With cryptocurrencies gaining mainstream traction, the report aims to provide clarity to investors on what lies ahead for Bitcoin prices based on historical patterns and developments.
What is Bitcoin (BTC)?
Bitcoin is the first and most popular cryptocurrency in the world. It was created in 2009 by the pseudonymous Satoshi Nakamoto, who published the Bitcoin whitepaper and developed the Bitcoin protocol.
Bitcoin introduced blockchain technology to the world. The Bitcoin blockchain is a public ledger that records all Bitcoin transactions ever made. It is decentralized, meaning no single entity controls it. The blockchain is maintained by a global network of computers known as Bitcoin miners.
Key attributes of Bitcoin include:
Decentralized
No central authority controls Bitcoin. It is maintained by a distributed network of users.
Limited supply
Only 21 million Bitcoins will ever exist. This scarcity gives Bitcoin value.
Pseudonymous
Bitcoin addresses are not linked to real-world identities by default, giving users privacy.
Secure
Bitcoin uses cryptography and the blockchain to ensure the security of payments and ownership records.
Divisible
One Bitcoin can be divided into 100 million smaller units called satoshis, allowing small transactions.
Permissionless
Anyone can use Bitcoin without the need for permission from authorities.
These attributes make Bitcoin unique compared to traditional fiat currencies and a promising digital asset for investment.
Factors Influencing Bitcoin Price
Many factors can affect the price of Bitcoin, leading to volatility. Some major factors include:
Supply and Demand
Basic economic theory states that when demand increases while supply remains constant, price goes up. As more investors and institutions adopt Bitcoin, demand rises. But since new Bitcoins are mined at a fixed rate, supply remains steady, driving prices up.
Media Hype and Public Sentiment
Positive or negative media coverage and public…
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