Current Bitcoin Value? What is it today, more important what will the emerging currencies value be tomorrow?
What gives the digital currency Bitcoin value?
Determining Bitcoins value is not as simple as looking at the Bitcoin to USD price yesterday or last week. There is no price to earnings ratio, no regulation, no holidays and it never closes. The Bitcoin market can move fast at any time, especially on thin volume. This volatility can be hard to stomach at first, but understanding why it happens is key.
Supply and demand are always key factors determining the current value of Bitcoin. If supply and demand become imbalanced, we see these large swings in price and volume.
Extensive mining operations selling new coin can lead to imbalances
Large Bitcoin mining operations find the majority of new blocks and sell some of these coins to cover operating expenses. Before these large mines existed, selling new Bitcoins was a little more predictable. The overall hash rate was much more diversified and selling coins to pay bills was less frequent.
This trading of newly minted coins can put pressure on the current price of Bitcoin, quickly adding to the overall supply on the market.
Bitcoins are spent more, hoarded less
Start-ups are raising millions of dollars in venture capital, taking in revenue and profit almost exclusively in BTC. Sometimes, these companies need to sell large quantities of Bitcoin on the open market to pay fiat based salaries, rent, taxes, and vendors. This sale increases the pressure on Bitcoins USD price.
Another factor affecting current Bitcoin value we did not have a few years ago, retail acceptance. Companies like Dell and Overstock that pay through a processor like Bitpay may never take possession of any coin. A business like bitpay cannot indefinitely take in Bitcoin without selling on the market themselves. As retail acceptance grows, market liquidity will increase further, and price volatility will be noticed less.
News events profoundly influence prices, up and down
Bitcoin news still has a significant impact on Bitcoin value, even if they turn out to be rumors. Notably, the multiple bans in China, Silkroad closure and seizure and MtGox bankruptcy all moved the markets dramatically. Some of these news events should move the markets, some should not, this is hard to decide without current information.
Moving on to Bitcoin quick facts