Valerios B.
2 min readDec 4, 2018

--

What affects Bitcoin price?

There are a lot of opinions out there. I want to clear it out by putting the most famous ones in a row and analyzing it.

1 Big whales
2 Regulations
3 ICOs cash out
4 Futures
5 Too much cryptos

1 Obviously a big seller can crash the market price if the buyers can't afford to buy all bitcoins at current price. So, there were a big story of tether printing and buying Bitcoin which could lead to Bitcoins price growth at the first place. You can also Google it and see how JP Morgan was buying Bitcoin at some exchanges, which probably lead to a price growth all the way up from 5000$ to 20000$. I don't pretend it's truth, but there was an information about JP Morgan Bitcoin buy orders and tether story. We had news also about Goldman Sachs subsidiary buying one of the biggest exchanges Poloniex. So let's put all this pieces in a big pictures, big boys came in the game buying huge amounts of Bitcoins, which they could make a sell of later, but before the sale off, we had some interesting things happened.

2 We have seen at one point big exchanges locking the possibility to sign up for new users. Probably there was put a limitation to buy Bitcoin on exchanges like coinbase, and closing this gateways for new money flow in to cryptos may also affect the market prices. Regulators try to limit or ban cryptocurrency operations.

3 By the time a huge activity happens around the crypto market, a lot of scammers make ico, and a lot of ICOs cash out from crypto, this is probably one of the reasons of price drops.

4 Futures, CME and CBOE launched BTC futures contract trading, some people may think that it can negatively/positively affect the Bitcoin price, but the futures price is pegged to real Bitcoin price and not the vice versa. There are unlimited amount of contracts may be bought so it doesn't really affect the price, and futures traders just do bet on BTC price like in a horse race. Due to interest that big boys like Goldman Sachs and JP Morgan showed in to Bitcoin, seems logical that they could manipulate the real bitcoin price and use futures market to short or long CME and CBOE traders, as director of CME says they have very small part of Bitcoin market too small to have any affect, you can do your own research on it by counting daily futures contract volume which is not higher than 150 millions of $. Comparing to traditional crypto exchanges it's just bottle of water in a big pool.

5 A lot of new crypto currencies came out lately which caused the price drop, Bitcoin dominance drop up to minimum of 30% from 90% in the last two years. Now it is like above 50% which shows that the main crypto market interest is in Bitcoin.

--

--