In November 2021, the price of Bitcoin exceeded $68,000 for the first time. And this marked the highest value that the most popular cryptocurrency had ever attained. However, the price has since dropped, shedding about 70% by October 2022. One would wonder why such a price decline. What is the value of Bitcoin? Just go to Bitcoin Storm and begin your journey today.

People consider the value of Bitcoin as the price at any moment. You can check the price of Bitcoin at any moment from various crypto trading and exchange platforms. One thing that you will realize is that the price keeps changing. You might find that the price is $20,000 in the morning but $24,000 by evening. And this is the concept of price volatility.

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Factors Affecting Bitcoin Value

The value of Bitcoin is subject to various macroeconomic factors. One of these is geopolitics, such as the ongoing war in Ukraine. The war has influenced a decline in the value of Bitcoin since it started in February. Since it started, the price of Bitcoin has declined significantly.

Another critical factor is the role of crypto influencers and celebrities. The behavior, tweet, pronouncement, or social media post by a big crypto influencer or celebrity on Bitcoin could affect the price. And this happened in 2021 when Elon Musk announced that his company, Tesla, would not be accepting Bitcoin payments because of environmental concerns.

Government regulations can also affect the value of Bitcoin. Currently, Bitcoin operates in a relatively unregulated environment in many countries. But there are increasing efforts to introduce rules on Bitcoin, which could significantly impact its value. For example, new regulations may cause the price to drop significantly.

Finally, Bitcoin is just like other assets that are subject to the forces of supply and demand. When Bitcoin demand is high, the price is likely to be high. Likewise, the price will drop when the availability is higher vis-à-vis the need.

Scarcity

Many crypto experts believe that the value of Bitcoin mainly emanates from its scarcity. Bitcoin has no intrinsic value per se. It lacks government or central bank backing as a decentralized digital currency. So, if the price of Bitcoin falls to zero, you will not have any other asset to back up your loss.

Scarcity explains the value of Bitcoin better because Bitcoin has a 21 million coins cap. And this means that no other Bitcoins will enter circulation after miners generate the 21 million coins. Considering the growing demand for Bitcoin, this then means that Bitcoin will always have a high value. According to analysts, Bitcoin's worth could rise to $100,000 in the foreseeable future.

Since its launch, Bitcoin's value has increased generally. And this is also another consideration when determining its value in the future. Despite the many periods of price drops and crashes, Bitcoin continues to increase in value, hence the increasing interest and demand.

Uncertainty

You cannot negate the place of uncertainty in determining the value of Bitcoin. While many factors could affect the price, the actual effect is uncertain. You cannot say that because Russia will end the Ukraine invasion tomorrow, the cost of Bitcoin will rise to a certain level.

Conclusion

It is challenging to value Bitcoin because of its volatility and uncertainty. However, people can value Bitcoin by considering various macroeconomic factors and changes in the crypto market.