The number of projects and tradable assets in the crypto industry has steadily grown in recent years. Among these digital assets, Bitcoin has been on a roller-coaster with the most volatile trading stories. After launching in 2009, the pioneering crypto experienced its first price bump in 2010 when it finally moved beyond its prolonged flat price of $0.10.
Traditionally, Bitcoin’s price changes have reflected investor enthusiasm, demand, and supply. Although initially intended as a payment method, Bitcoin’s use cases have metamorphosed into industry-scale financial institutions to the extent that you can now Swap BTC to USDT. It has attracted a vast number of traders who see Bitcoin as a store of value, a hedge against inflation, and a way to generate wealth.
Most of these traders bet on the price of Bitcoin, which is why we have institutions and experts committed to tracking, analyzing, and predicting the price of this digital gold. Today, we look at Bitcoin’s recent price performance to keep you informed about its volatility so that you can make an informed investment decision in the crypto space.
Current Market Situation
Bitcoin’s price has been fluctuating lately without stabilizing at any base value. Although the price of BTC is still high by 17% year-to-date, a 24-hour price analysis shows a 13.38% price dip as of this writing. The price dip over the last 7 days is at 23.95%. This has been the trend when looking at the current market price of Bitcoin over the past few days and weeks.
This change implies that after soaring to an all-time high of $73,000 in March 2024, it is back to trading around the $52,000 mark. A downward trend continues to be evident as crypto investors come to terms with the latest outcomes of the Federal Open Market Committee meeting in June. As a result of the FED holding interest rates steady, many investors gave up on expecting any significant rate cuts before the year’s end thus throwing the crypto into a downward trend.
As expected, Bitcoin rarely goes down alone, which is why the June meeting had a cascading effect on all major cryptos. Ethereum, for instance, went down by 20.75% in a 24-hour period, plunging it back to $2,300. A similar trend has been observed with other key assets such as Solana, BNB, Cardano, and XRP, which all saw a 15.86%,15.92%, 16.14 and 15.67% price drop, respectively.
The overall impact has been an avalanche of outflows from Bitcoin ETFs, which reached a whopping $1.2 billion. That said, Bitcoin’s price could dip further or hold steady. It all depends on how investors perceive this significant inflation gauge.
4 Reasons Why Bitcoin’s Price Fluctuates
Like any cryptocurrency, Bitcoin’s price is highly volatile. Its volatility primarily stems from investors’ constant hope for an ever-increasing price as they anticipate reaping huge profits from the asset. It is, therefore, advisable for any investor looking to enrich their portfolio with Bitcoin to thoroughly research and come to terms with the volatile nature of this digital asset before investing in it.
Here are the four main factors that affect the price of Bitcoin.
1. Bitcoin’s Role in the Remittance Market
Historically, cross-border payments have been burdened with high fees and slow transaction processing speeds. The intervention of digital technologies has further agitated the quest for more efficient, secure, transparent, and faster cross-border payment methods.
One of the most fronted solutions has been Bitcoin alongside stable digital currencies such as USDT. Bitcoin is a promising solution because it can transform cross-border payments through streamlined settlement flows, financial inclusion, and reduced transaction costs. This newfound niche for Bitcoin has considerably driven up its demand and as the law of demand and supply dictates, the price of Bitcoin has increased as a result.
The road map to success in crypto lies in anticipating and capitalizing on significant economic situations that drive up the demand for a digital asset. For Bitcoin, cross-border payments have been such a niche, and as the growth in its adoption continues where government regulations support it, we may yet see the best performance of BTC in years.
2. How Bitcoin ETFs Drive Price Growth
Bitcoin’s price is also affected by the supply and demand of crypto exchange-traded funds such as Bitcoin ETFs. Due to Bitcoin’s growth and its huge standing in the crypto space as a store of value and income-generating investment, certain derivatives have been created to provide alternative investment options, which has greatly impacted the price of Bitcoin.
The SEC approved the first Spot Bitcoin ETFs in January 2024 after a much-awaited process. Initially, ETFs were only authorized to give investors indirect exposure to Bitcoin through futures contracts. As of this writing, there were over 34 known Spot Bitcoin ETFs with a combined value of over $60 billion.
3. Global Economic Indicators and Cryptocurrency’s Reaction
Unlike equities or gold, which are cushioned by institutional investments, Bitcoin is largely retail-investor-driven. This puts it in a situation where it’s particularly susceptible to stresses in the global economies. This is perhaps due to the fact that BTC’s liquidity is insufficient to manage massive flows often induced by panic without causing significant price variations.
Global events affecting world economies, such as military conflicts, structural breaks in market dynamics, recessions, unemployment spikes, and other similar events, often lead to a shift in trading patterns, thus influencing Bitcoin’s price volatility.
4. Influence of High-Profile Celebrity Divestments
In recent years, the industry has felt the impact of social media influencers or celebrity endorsement of certain cryptocurrencies. News of high-profile celebrities and investors reducing their holdings of specific cryptos, such as Bitcoin, can change market sentiment significantly.
A perfect example is Elon Musk’s endorsement of Dogecoin and his constant tweets about Bitcoin. His actions tend to change the wave of the crypto space to some extent, often leading to sharp price movements. When he positively opines about Bitcoin, the asset experiences a price surge, and when he negatively comments on the crypto, its price tends to dip.
Future Trajectory
At a glance, Bitcoin’s price movements are affected by the same reasons as traditional investments. For instance, the law of supply and demand applies to the price of BTC in equal measure. However, Bitcoin may react more sharply to this law as opposed to other investments.
In the same instance, Bitcoin’s price has historically gone up when it started being used in cross-border payments and when the SEC approved ETFs.
Bitcoin’s price has also been affected by global economic events and recesses. Whenever unemployment rates worldwide rise, financial institutions tend to adopt a raft of structural measures that affect the money supply. As a result, trading patterns shift considerably, thus affecting asset prices, including Bitcoin’s price.
Investors looking to track Bitcoin’s price should also be aware that it’s difficult to lock in its price at any given time, as it can shift even in reaction to a tweet by a celebrity or influential figure.
However, even as Bitcoin continues to display erratic price movements, experts believe it will surpass its base support level and once again bounce back to its high of $72,010 set in June. Gov.Capital predicts BTC’s price to reach $91,245 by the end of the year and hit $123,245 by 2025. Given the market sentiment and the overall forecast of most crypto analysts, there’s a strong indication that Bitcoin’s price will finally cross the $100,000 mark in 2025.
