The Bitcoin price achieved an all-time high of $1162 on 30 November 2013. A subsequent price correction continued for most of 2014 despite increasing mainstream adoption and acceptance of Bitcoin by the likes of computer giant Dell and former competitor PayPal.
Bitcoin Price Chart
In September 2014, the Bitcoin price had retraced to near $400 from the $1,162 top after achieving a historically unprecedented growth of 1.4mil percent in less than three-and-a-half years.
Drawing channel lines on the long-term Bitcoin price chart yields an interesting prospect of both the end of the decline as well as the potential heights that a future rally may achieve.
Influences on the Bitcoin Price
Bitcoin price is affected by various factors that cause pushes and pulls on the Bitcoin exchange price.
- General Bitcoin exchange transactions
- Company payrolls transacted in bitcoins
- Bitcoin price speculation
- Merchants who “cash-out” bitcoins
Readers can find more information in the detailed article, What Affects the Bitcoin Price?
Despite price swings caused by the factors listed above, the Bitcoin price is fundamentally – and over the longer-term – affected by Bitcoin’s perceived value.
Bitcoin and the Global Economy
Although the Bitcoin price is quoted in US Dollars, Euros, Chinese Yuan, etc. it is not extrinsically linked to these national currencies. Fluctuations in the exchange price of the US Dollar, therefore, do not cause sympathetic fluctuations in the Bitcoin price.
Being without a central bank (or any centralized authority, for that matter) the Bitcoin price floats freely in the global economy with its price entirely determined by the principle of Supply-and-Demand.
Due to Bitcoin’s multifaceted nature it is, as a currency, subject to exchange fluctuations and, as a tradeable commodity, fluctuations resulting from speculation in it price. In the long-run, it can be expected that the Bitcoin price will steadily increase (with intermittent downward corrections) as its utility and decentralizing effect spreads.
Pre-existing weaknesses in the global economy are once again threatening to create a swirling vortex that may pull many currencies, commodities and derivative markets into its maelstrom. As the concern for the health of the global economy deepens, it could be expected that Bitcoin will quickly come into its own: as a store of value and as a payment network. Unlike other centralized currencies and payment systems, Bitcoin can continue functioning, despite regional, national or even global economic disruptions.
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Readers can follow Bitcoin price analysis updates each weekday on CCN. In-depth analysis articles are published every Sunday.
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Bitcoin price charts from TradingView. Images from Shutterstock.