Bitcoin’s price today
This piece can only start in one place – Bitcoin’s current price.
It’s important to remember that not everywhere has accurate data when it comes to live Bitcoin prices. We pull our data from a reputable provider which canvasses several top exchanges every few seconds, meaning that the data is about as accurate as it can be.
This isn’t the case for some less reputable sites who rely on just a couple of exchanges with low volume, where prices can jump independent of the wider market.
What affects the price of Bitcoin?
There are several factors that can affect the price of Bitcoin. Some of these are due to internal issues such as Bitcoin’s design and tokenomics, while other external factors such as its adoption and the wider crypto market also play an important role. We’ll look at these separately.
Bitcoin is still viewed as the original and best example of a truly decentralized currency – the only one in the world. Its censorship resistance has seen it adopted by citizens of countries with oppressive regimes and by entire countries as legal tender.
Prior bull runs have coincided with spikes in usage by specific countries who saw Bitcoin’s use case as an answer to issues with fiat currencies, something which continues today.
Bitcoin’s total supply is 21 million, which means there will never be more than this number in circulation. More than 19 million of these have already been mined. However, it is suspected that over 3.5 million bitcoins have been lost or are permanently unattainable, which brings this number down.
This fixed supply and low total amount compared to other cryptocurrencies whose total supplies run into the billions makes Bitcoin a scarce commodity within the space.
Bitcoin has a ‘halving’ every four years, where the amount of bitcoin awarded to the miner of the next block in the chain is cut in two. This was implemented to counteract the inflation caused by new bitcoin entering the supply, and to maintain scarcity.
Theoretically, the reduction in the rate of Bitcoin issuance means that the price should increase if demand remains the same over time.
Demand and desirability
Bitcoin has grown from a shadow alternative currency to a genuine player in the world financial scene. Its price movements are commented on in traditional financial circles, and there are some seriously big adopters out there, from whole countries to massive hedge funds.
This boom in popularity has fueled the desire for everyone to own some bitcoin.
There’s no denying that, when a Bitcoin bull market is in full swing, many late buyers are doing so purely on a speculatory basis, hoping to join the fun and make a killing like everyone else. This, inevitably, pushes prices up.
Just as prices boom thanks to speculation, they can also boom (and bust) due to market manipulation. This can come in many forms, from well-placed positive and negative headlines in mainstream media outlets from those with a vested interest in the price moving accordingly, to well-heeled leverage traders carrying out short and long squeezes to manipulate price in their direction.
Real life events
As well as smaller or non-events being taken out of context, genuine real world events can also affect Bitcoin’s price. Some examples include the closure of Silk Road in 2013, the collapse of Mt. Gox in 2014, and the COVID-19 scare in March 2020. All of these events crashed the price of Bitcoin.
On the flip side, 2019 saw a spike in the Bitcoin price when China publicly adopted blockchain technology, and we saw similar moves in 2021 when El Salvador announced that Bitcoin would be legal tender and Tesla bought $1.5 billion worth of the cryptocurrency.
Can you trust Bitcoin ‘experts’?
The notion of a Bitcoin or cryptocurrency ‘expert’ is not something that many in the space are easy with, especially when it comes to price. There are plenty around who know almost everything there is to know about how Bitcoin works, but when it comes to price action, such predictions are usually fueled by the perception of Bitcoin as an asset – those who are pro-Bitcoin usually foresee a very rosy future, while those who are against it as a concept continue to predict its imminent demise.
It is important, then, to ignore these voices at the far ends of the Bitcoin spectrum – the lovers and the haters will not offer an objective viewpoint on Bitcoin’s price potential. If you must seek the opinion of others on Bitcoin’s potential price, research them first to ensure their opinion is based on tangible evidence and not their emotions.
It’s also important to remember that Bitcoin is now a global asset that plays in the same ballpark as huge indices such as the S&P 500 and the NASDAQ. This means that it is affected by the same headwinds and tailwinds as these markets, meaning it’s probably better to pay attention to analysts who discuss the financial markets as a whole, and not just Bitcoin.
These experts may not talk about Bitcoin per se, but if there are any major events or policy decisions that are impacting global markets, such as central banks raising interest rates to curb inflation, you can bet they’re affecting Bitcoin too.
How does the future look for the Bitcoin price?
Don’t worry, we’re not here to make price predictions, but we are going to look at the factors that will impact Bitcoin’s price in the short and long term.
Short term factors
Bitcoin enjoyed a typically extraordinary bull market between 2019 and 2021, which saw it rise from $3,500 to $69,000 in 18 months. Bitcoin has spent the past year coming down off that high and is now firmly entrenched in a bear market, which usually takes around 18 months to two years to play out.
You might have heard of a little thing called FTX. The collapse of what was considered a gold standard crypto titan, plus all the other platforms that went bust before it and have gone bust since, have left a reputational stain on the crypto sector that will take many years to wipe clean.
Of course this isn’t Bitcoin’s fault, but the end result is an eradication of trust in the entire space, and you can be sure that new entrants to the market will be reminded about FTX again and again from those who would like to see crypto eradicated.
Many countries in the world are going through a period of financial uncertainty that hasn’t been witnessed since the 1970s. Various factors are to blame for this, but the end result is that the world at large has far less discretionary capital to spend on luxuries and risk-on assets, like Bitcoin.
Institutions too have been cut off from cheap money, and until they are allowed to borrow at low levels again there will be far less speculation.
Long term factors
Bitcoin keeps on trucking
While the collapse of FTX and other platforms has hit the reputation of the wider crypto sector, this will pass. In the same way that Amazon and eBay emerged from the dotcom bubble, so Bitcoin will emerge from these scandals.
Its use case and functionality have not changed, and as long as it keeps on churning out blocks and offering users a censorship-free form of money then it will rise again from the ashes..
Increasing popularity drives scarcity
The number of people owning 1 BTC or more has grown exponentially over time, with 2023 set to see its one millionth whole bitcoiner. As Bitcoin’s popularity continues to grow over time, more and more people will want to join this exclusive club, or at least own some portion of a bitcoin, meaning there is less to go round.
This increased scarcity will help drive prices up, especially as the rate of supply decreases with every halving. This is where Bitcoin’s internal tokenomics play out to its advantage.
Regulations are coming
While many aspects of Bitcoin’s long term future are positive, there are some clouds on the horizon. We’ve already seen throughout history that certain events, both real and manipulated, have impacted Bitcoin’s price, with the repercussions sometimes being felt for years afterwards.
The clouds come in the form of regulation. European regulators have already clamped down hard on the crypto sector, and U.S. regulators are planning something similar. Anything that destroys Bitcoin’s core principles, such as its strong sense of censorship-resistance, or that undermines the proof-of-work mechanism used to mine Bitcoin, could have damaging long term effects on Bitcoin’s price.