What determines the Bitcoin price?

1.How is Bitcoin valued? Market forces called supply and demand influence Bitcoin's price. The price typically decreases when there are more sellers or vice-versa.

Bitcoin (BTC) is a digital coin, which is not issued by any government or legal body, in contrast to fiat currencies like the dollar, pound, euro and yen. To create, store and move BTC, a dispersed network of users and cryptographic protocols are required.

 Investors, carry out their commercial transactions directly as opposed to using a middleman. The peer-to-peer network removes trade restrictions and streamlines commerce. Satoshi Nakamoto first proposed the world's first cryptocurrency in 2008, which was launched in January 2009.

The number of businesses accepting Bitcoin is growing daily, giving it a real market value. However, this virtual currency has been severely hampered by security issues and volatility. Even at the height of its popularity, it was challenging to find precise answers to common questions like what determines Bitcoin's value, who sets Bitcoin’s price and whether Bitcoin has intrinsic value?

The same market dynamics, i.e., supply and demand, that affect the price of other goods and services, also decide the value of Bitcoin. Prices will probably rise if there are more buyers than sellers or vice-versa. Furthermore, it is essential to note that the price of Bitcoin is not determined by a single entity nor can it be traded in a single location. Based on supply and demand, each market or exchange sets its price.

2.What factors could impact Bitcoin’s price? Various factors impacting Bitcoin's price include the supply and demand of BTC, competition from other cryptocurrencies and news, cost of production and regulation.

Demand Supply

Those with a background in economics are aware of the law of supply and demand. However, if you are unfamiliar with this concept, let's help you to understand. As per this law, supply and demand market forces work together to determine the market price and the quantity of a specific commodity. For instance, the demand for an economic good declines as the price increases, and sellers will produce more of it or vice-versa.

An event called Bitcoin halving impacts the Bitcoin's price like the situation in which the supply of BTC decrease whereas the demand for BTC increases. As a result of the high demand, the price of BTC will move upward. 

Moreover, Bitcoin was created by Satoshi Nakamoto with a 21 million BTC hard cap. That said, miners will no longer receive new Bitcoin for confirming transactions once that cap has been reached. The four-year halving of block rewards might not affect the price of BTC at that point. The things that will determine Bitcoin’s value will instead be its real-life applications.

Competition and news

BTC faces competition from altcoins like Ethereum (ETH) and meme coins like Dogecoin (DOGE), making portfolio diversification appealing to investors. Any upgrades by the existing cryptocurrencies might drive BTC's price down in contrast to a completely different scenario in which Bitcoin was the only existing digital currency. Due to media coverage, you may want to buy crypto assets with a positive outlook and ignore those with a shady future. 

Cost of production

Production costs for Bitcoin include infrastructural expenses, electricity charges for mining and the difficulty level of the mathematical algorithm (indirect cost). The various levels of difficulty in BTC's algorithms can slow down or speed up the currency's production pace, impacting Bitcoin's supply, which, in turn, affects its price.

Regulation

Cryptocurrency regulations are constantly changing, from countries like El Salvador accepting it as a legal tender to China formally banning crypto transactions. The price of BTC could decrease if there is concern over a specific government's decision against cryptocurrencies. Additionally, regulatory uncertainty will create fear among investors, dipping Bitcoin's value even further.

3.Why is the Bitcoin price so volatile?

Uncertainty regarding the intrinsic value of Bitcoin and BTC's future value makes it a highly volatile asset.

A decreasing amount of new BTC is created each day since a finite quantity of Bitcoin exists. To maintain a steady price, demand must match this inflation rate. The Bitcoin market is quite small compared to other industries, and media coverage alone can drive its price up or down. For instance, news about Tesla's willingness to accept BTC will drive its value upwards or vice-versa, making Bitcoin’s price highly volatile.

Similarly, a tweet that the Bitcoin blockchain has been halted will drive its value down, followed by Bitcoin trading volume. So, considering high volatility, can the Bitcoin price go to zero? Technically, it is possible. For instance, the price of BTC is not pegged to any fiat currency like the U.S. dollar or any other real-world asset; it is susceptible to value crashes. However, we have seen that algorithmic stablecoins like Terra USD can create market turbulence too. 

Nevertheless, for such a catastrophic event to happen in the case of BTC, many red flags, such as an extended bull market, will appear in advance to allow investors to protect their funds. Also, the complex Bitcoin architecture is not easy to destroy; however, its scalability issues may put its future at risk. But, that does not mean that BTC's price will suddenly fall to zero.

4.What will happen if Bitcoin's price crashes to zero?

If BTC's price drops to zero, it will impact the traders, institutional investors, price of other digital currencies, cryptocurrency enterprises and the whole financial system.

Now, assuming that BTC's price declines to zero, it will impact the price of other cryptocurrencies. As a result, many investors could just withdraw (completely or substantially) to reduce losses, depending on their type of investment. 

Large institutional investors may be particularly at risk because more and more have made larger investments to diversify their portfolios. The most exposed would be those who invested more recently at high prices or in crypto derivatives, and they would need to liquidate other assets to fulfill margin calls.

Customers may lose faith in a system that appears to be crumbling, affecting cryptocurrency enterprises like Coinbase, Binance, etc., that depend on customers for transaction flow to generate revenue and funding/investments to grow. Investments in these companies may also stop altogether or significantly decline. Additionally, such enterprises may no longer be able to hire, pay or attract the personnel necessary to run and expand them.

 

 

Recent All-In Podcast discussing Crypto

Just wanted to open a discussion about comments made on the All-In Podcast.

For those unfamiliar, the podcast was started by four friends who are wealthy venture capitalists/entrepreneurs. The podcast was started during the pandemic and covers a range of topics from politics and culture to markets and science. Just four buddies giving their hot takes on recent events. The show has become quite popular.

On a recent show they discussed the recent implosion of defi. How unregulated crypto is, are these securities? Blah blah blah

The reason I'm making this post is that there was one person on that show that gave an opinion that made me put on my tinfoil hat.

David Friedberg invests in breakthrough technologies. I've really appreciated his opinion and I like how he plays devil's advocate on the show. He looks at things through multiple perspectives.

When the topic of defi, 3AC, Celsius came up, it eventually transitioned to Bitcoin and Friedberg said (paraphrasing here):

"I keep hearing how this is a currency but y'know how we are measuring the success of Bitcoin in dollars. This is just speculation"

I was surprised by this simplistic take from Friedberg. It was not like him at all to give such a dismissive opinion. When he disagrees with something, he usually has a good point as to why he disagrees.

This guy said we would have food shortages and energy problems in February when Russia invaded Ukraine.

This guy said in 2021 the global market would correct in 2022 and there would be a power struggle from Russia.

David Friedberg is no dummy

When you dig deeper according to Friedberg his intentions are to fund things that are good for the earth but also economically viable.

"I believe sustainability in the 21st century does not arise from convincing consumers to consume less, I think sustainability arises from building technology based solutions that allow consumers to consume more."

So given that we know that Bitcoin can actually subsidize green energy and permissionless transactions.

It makes me wonder. Why wouldn't Friedberg endorse this technology?

Why does he sound like a boomer who got his opinion from a Fox news sound bite?

Either Friedberg has totally glossed over the significance of Bitcoin. Which given his character seems very unlikely.

Or he is giving a disingenuous opinion.

I wonder how many people watched that podcast and said "well maybe it's time to sell my Bitcoin these guys are some of the smartest investors"

Something doesn't jive

State of Play - Halfway through '22: Addressing supporters, detractors and FUDsters alike.

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Around 18 months ago, we embarked on an incredible journey. We aimed to bring something completely new and unheard of to the world of crypto which had never been done before. We have learned much along the way, and, for sure, we may not have always got everything right immediately. But, hey, when you’re inventing something completely new, you always get it perfect the first time… right?

Now, midway through 2022, we thought it was time for us to give a full roundup of where Bumper is at, especially given the context of the events in the wider crypto market so far this year.

We also would like to take this opportunity to dispel the FUD, and give all our supporters, detractors and FUDsters alike some more information as to where we are, and what you can expect from Bumper in the not-too-distant future.

Launch Delays

If you’ve been following our regular fortnightly Sitreps, and office hours livestreams with the Bumper co-founders, you will be aware that we discussed the delays to our protocol launch.

One of the main reasons for delay was the level of work involved in developing arguably one of the biggest codebases in the DeFi space.

When we delivered the code to the auditors in May, it weighed in at over 11,000 lines of code with over 100 smart contracts.

To put that into perspective, it’s worth comparing our codebase with other top DeFi protocols, to get a clear understanding of the sheer size and complexity of Bumper:

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Comparing Bumper codebase and smart contracts versus other leading DeFi protocols

Development, testing and auditing something of this magnitude takes time, and we are now in the latter stages of ensuring that we have covered all bases and developed a truly valuable and robust protocol.

Finally, in light of some of the shocks we’ve seen in the DeFi space recently, we believe it’s better to be absolutely laser-focused first and foremost on security and stability, and if this means it has taken longer than expected to release Bumper, then, for the safety of our users, so be it.

Protocol Release

That said, Bumper is going to be launched very soon, in a phased manner. We feel that a stepping-stones approach is infinitely more secure than going straight to an all-bells-and-whistles release, and gives us time to assess the real-time impact of the protocol and respond accordingly.

Some of the extended functionality (including DAO governance, fungibility of Bumpered Assets and so on) will be released later down the line. This means we can make absolutely certain that the protocol is performing ‘in the field’ as intended before we extend it out as a fully decentralised model, with enhanced functionality.

It is worth noting, however, that as the development of Bumper has progressed, more features have been added by our engineering team, some of which are new, and others that were implemented well ahead of their original schedule in the roadmap.

Our goal was always to build a truly unique and powerful solution to crypto price volatility. It doesn’t make any sense to rush it and potentially introduce mistakes by being focused more on deadlines than over performance and purpose.

For this reason, we have concluded it is better not to give hard and fast deadlines until we are absolutely certain we won’t have to push them back.

The feedback we’ve had from some of the most active members of our community does seem to support our approach. You guys know who you are, and we are truly grateful for your input.

Team Expansion

During 2022, we have welcomed some new members to the Bumper core team, hiring some exceptional talent to work alongside the co-founders.

Our new additions include an Office Manager, Senior Operations Manager, Content Manager, Community Relations Manager, and Support Engineer, as well as onboarding various top-tier developers and designers.

Partnerships

We know that solid partnerships will only help enhance Bumper’s value proposition, widen our exposure in established communities and increase the utility of the BUMP token, and subsequent adoption of the Bumper protocol.

Over the last year, Bumper has announced a number of partnerships with key industry players, which include InsureAce, Aurora, Metis, Panther and MilestoneBased, among others.

We are currently engaged in further high-level talks with a number of high profile businesses and protocols, all with the goal of creating mutually beneficial and purposeful partnerships, and we’ll make further announcements as these are finalised.

Addressing the FUD-sters and Naysayers

Unfortunately, we have endured a fair share of FUD and negativity in comments on social media recently, with some people espousing the (baseless) accusation that Bumper is a scam, and it’s time for us to address this head on.

For those who genuinely think Bumper is a scam, well, clearly, we aren’t very good at being crypto-crooks, seeing as how we keep spending a great deal of time, energy and money on perpetuating this highly elaborate ruse, with our team of developers, UI/UX designers, smart contract engineers and economic architects working tirelessly over many months to develop the Bumper protocol… and all whilst failing to run off to the Bahamas with the money.

Like all the other scams and rug-pulls, we’d surely have disappeared months ago, instead of continuing to work on developing and enhancing the protocol, spending vast amounts of money on audits, simulations, expanding our team, and visiting numerous top-tier expos and crypto trade shows such as Bitcoin 22, Consensus 2022, Permissionless, Token2049, and more.

Some people have even suggested we haven’t been giving updates to the community, which is strange, as every fortnight we host Office Hours livestreams on YouTube, followed by After Hours AMA’s with the co-founders in our Discord channel.

We also release detailed Sitreps and development updates on alternate weeks, and we’re active on social media, and now focused on expanding the networks we operate on, as well as improving how we engage publicly.

If Bumper is a scam, it’s clearly so inept that it would go down as the most incompetent rug-pull in history.

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On the other hand, maybe, just maybe, we’ve actually been busy, with our heads down developing, testing and deploying one of the most unique and valuable protocols in the DeFi world: a provably-fair, stable and secure system which has the potential to transform the crypto-space.

Token price

We appreciate that many token holders may be frustrated at the large drop in the price of BUMP since it was launched, and this is a result purely of users selling into the market, for whatever reason. We can assure you that no member of our team has sold even a single token to date.

It’s worth noting that the first half of 2022 has seen a steady (and sometimes steep) decline in the general crypto market. This has resulted in pretty much every single cryptocurrency being down well over 60% in the year to date, with many of the world’s top protocols losing similar (and in some cases, more) value than BUMP, despite having fully operational protocols and huge communities of active users.

When we release the protocol, BUMP will be required to open positions, and this utility will ultimately be the catalyst which drives demand for the token.

The first half of 2022 has highlighted how much of a need there is for the Bumper protocol, and we are genuinely excited about where we are right now.

In a time of heightened uncertainty in both the crypto-sphere and global markets in general, the need for Bumper to provide both price protection as well as a provably-fair and sustainable solution for yield generation for liquidity providers, has never been clearer.

The question we are asked most often is when the protocol will be available for use, and what this tells us is there is a clear demand for it.

As time has passed, we have become more and more aware of the different use cases for Bumper, some of which open the door to innovative solutions to as-yet-unsolved problems in the DeFi space. As occurred during the last crypto winter, this is when it’s time to innovate, and Bumper does exactly that.

For those who may have concerns about Bumper, we encourage you to come and join us in our Discord, participate in the conversation and actually talk to us and ask questions. We like questions, and more importantly, we are listening, and responding, to our community members.

Again, we would like to acknowledge and thank those in our community who have continued to engage and support Bumper.

What you can do to help Bumper grow

If, like us, you wish to see Bumper succeed and grow magnificently, we encourage you not only to follow us on Twitter, Medium and on Reddit, but actually directly participate, and share articles and updates with the world.

Our focus over the coming weeks, alongside the launch of the protocol, is to spread the word about Bumper, far and wide.

With a proactive community, Bumper will achieve exponential growth and the resultant demand for the token will increase.

Get Bumper updates, including launch release dates and more.

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DISCLAIMER:
Any information provided on this publication is for general information purposes only, and does not constitute investment advice, financial advice, trading advice, recommendations, or any form of solicitation. No reliance can be placed on any information, content, or material stated on this publication. Accordingly, you must verify all information independently before utilising the Bumper protocol, and all decisions based on any information are your sole responsibility, and we shall have no liability for such decisions. Conduct your own due diligence and consult your financial advisor before making any investment decisions. Visit our website for full terms and conditions.

READ ON THE BUMPER BLOG

'Wild ride' lower for BTC? 5 things to know in Bitcoin this week

The holiday weekend is making everyone nervous as BTC price action hovers at $19,000.

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Bitcoin (BTC) starts a new week still in holiday mode with United States financial markets off for Independence Day.

The largest cryptocurrency, stuck below the increasingly daunting $20,000 mark, continues to feel the pressure from the macro environment as talk of lower levels remains omnipresent.

After a quiet weekend, hodlers find themselves stuck in a narrow range while the prospect of a breakout to the upside appears increasingly hard to believe.

As one trader and analyst singles out July 4 as the site of a "wild run to the downside" for crypto markets, the countdown is on for Bitcoin to weather the aftermath of the latest Federal Reserve rate hike.

What else could the coming week have in store? Cointelegraph takes a look at the potential market-moving factors for the days ahead.

BTC price bides its time over long weekend

Bitcoin emerged from the weekend unscathed, but the classic pitfalls of off-peak trading remain.

The United States will not return to trading desks until July 5, providing ample opportunity for some classic weekend price action in the meantime.

So far, the market has held off when it comes to volatility — with the exception of a brief spike to $18,800, BTC/USD has circled the area between $19,000 and $19,500 for several days.

Even the weekly close provided no real trend change, data from Cointelegraph Markets Pro and TradingView showed, with the psychologically significant $20,000 unchallenged.

BTC/USD 1-week candle chart (Bitstamp). Source: TradingView

"While below the range low we can expect a drop down to $18,000," popular trading account Crypto Tony reiterated to Twitter followers as part of a fresh update on July 4.

"Been a very boring few days in the markets, and this is classic for a mid range." 

In terms of targets to the downside, others continued to eye the area around $16,000.

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With no meaningful Bitcoin futures gap and flat performance on Asian markets, meanwhile, there was little to be had in terms of short-term price goals for short-timeframe traders.

The U.S. dollar, meanwhile, continued to hold near twenty-year highs after returning from its latest retracement defiant.

The U.S. dollar index (DXY) stood above 105 at the time of writing.

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U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView

Gold nears "blast off" against U.S. equities

With Wall Street closed for Independence Day, U.S. equities can take a breather on Monday.

For one popular chartist, however, attention is focusing on the strength of stocks versus gold in the current environment.

In a Twitter thread on the day, gold monitor Patrick Karim specifically flagged the precious metal as being about to hit a historical “blast off” zone against the S&P 500.

After bottoming out at the end of 2021, the ratio of gold to the S&P has recovered throughout this year, and is now about to cross a boundary, which has historically led to significant upside afterward.

“Gold closing in on ‘blast off zone’ versus US equities. Previous take-offs have unleashed important gains for Silver & Miners,” Karim commented.

The situation cannot be said to be the same in U.S. dollar terms, with USD strength keeping XAU/USD firmly in its place below $2,000 since March.

Nonetheless, for silver fans, the implications are that even a modest push-through for the XAU/SPX ratio will bring significant returns.

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The forecast again calls into question the extent of Bitcoin’s ability to break with macro trends. A breakout against BTC for gold would be the natural knock-on effect should Karim’s scenario play out thanks to ongoing correlation with equities.

“After escaping the sideways pattern that had formed for a 1.5 year period, the correlation coefficient increased sharply to 86% vs S&P 500,” popular trader and analyst CRYPTOBIRB summarized at the weekend.

“Now, at 0.78 ratio it remains strongly positive.”

Fellow analyst Venturefounder noted that Bitcoin also remains tied to moves in the Nasdaq.

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Against the dollar, Cointelegraph meanwhile reported, Bitcoin’s inverse correlation is now at 17-month highs.

Crunch time for Hayes' "wild ride to the downside"

July 4, apart from being Independence Day, is being watched by one market player in particular as a public holiday like no other — at least for Bitcoin.

With markets closed and BTC price action already teetering on the edge of support, Arthur Hayes, former CEO of derivatives platform BitMEX, has singled out this long weekend as one long day of reckoning for crypto markets.

The reasoning seems logical. The end of June saw the Federal Reserve raise key rates by 75 basis points, providing fertile ground for an adverse reaction from risk assets. Low-liquidity “out-of-hours” holiday trading increases the potential for volatile price moves up or down. Combined, the cocktail, Hayes warned last month, could be potent.

“By June 30 (second quarter end), the Fed will have enacted a 75bps rate hike and begun shrinking its balance sheet. July 4 falls on a Monday, and is a federal and banking holiday,” he wrote in a blog post.

“This is the perfect setup for yet another mega crypto dump.”

So far, however, signs of what Hayes says will be a “wild ride to the downside” have not materialized. BTC/USD has stayed practically static since late last week.

The deadline should be Tuesday, July 5, as the return of traders and their capital could provide liquidity needed to steady the markets as well as buy up any coins going cheap in the event of a last-minute downturn.

Hayes added that his prior forecasts of BTC/USD bottoming at $27,000 and ETH/USD at $1,800 already “lay in tatters” in June.

Mining difficulty is still rising

Despite considerable concern over miners’ ability to withstand the current BTC price downturn, Bitcoin’s network fundamentals remain calm.

An impressive testament to miners’ resolve to stay on the network, difficulty is not planning to reduce at the upcoming readjustment this week.

After decreasing by a modest 2.35% two weeks ago, difficulty, which automatically rises and falls to take into account fluctuations in miner participation, will hardly change at all this time around.

According to estimates from on-chain monitoring resource BTC.com, difficulty will even rise should current prices stay the same, adding 0.5% to what is a metric still near all-time highs.

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

When it comes to miners themselves, opinions consider that it is the less efficient players — possibly newcomers with higher cost basis — who have been forced to exit.

Data uploaded to social media by Charles Edwards, CEO of asset manager Capriole last week meanwhile puts the production cost for miners en masse at around $26,000. Of that, $16,000 is electricity, meaning that miner overheads directly influence their ability to limit losses in the current environment.

“We traded below Electrical Cost in June, however the floor has since dropped as inefficient miners capitulate,” Edwards noted.

Bitcoin miner production cost chart. Source: Charles Edwards/ Twitter

A sea of lows

Bitcoin on-chain metrics pointing to record overselling is nothing new this year and in recent weeks especially.

Related: Top 5 cryptocurrencies to watch this week: BTC, SHIB, MATIC, ATOM, APE

The trend continues in July, as the network returns to scenarios not seen since the aftermath of the March 2020 cross-market crash.

According to on-chain analytics firm Glassnode, the number of coins being spent at a loss is now the highest since July 2020. Glassnode analyzed the weekly moving average of unspent transaction outputs (UTXOs) in loss.

Bitcoin UTXOs in loss chart (7-day moving average). Source: Glassnode

Similarly, the percentage of UTXOs in profit hit a two-year low of just over 72% on July 3.

Bitcoin % UTXOs in profit chart (7-day moving average). Source: Glassnode

Bear markets can produce some welcome, if rare, silver linings. Bitcoin transaction fees, once painfully high during bullish periods of intense network activity, are now also at their lowest since July 2020. The median fee, Glassnode reveals, is $1.15.

Bitcoin median transaction fee chart. Source: Glassnode

As Cointelegraph reported, the same is true for Ethereum network gas fees.

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source: https://cointelegraph.com/news/wild-ride-lower-for-btc-5-things-to-know-in-bitcoin-this-week

Central African Republic launches national cryptocurrency

President Faustin-Archange Touadéra of the Central African Republic (CAR) launched Sango Coin as the country's national cryptocurrency in a virtual event broadcast on Sunday.

• Sango Coin and bitcoin will exist as recognized cryptocurrencies in the Central African Republic.
• The token will be used to modernize the country’s infrastructure and a planned metaverse project.

IKONIC will allow fans to own and share the finest moments in esports history and will give fast-growing multimillion-dollar esports events and businesses a new way to connect with their audience.

IKONIC will allow fans to own and share the finest moments in esports history and will give fast-growing multimillion-dollar esports events and businesses a new way to connect with their audience.

Video clips of the most insane and spectacular gaming feats will be easily mintable into NFTs with just a couple of clicks. And with a click or two more, they will be listed and ready to trade on IKONIC’s marketplace.

Creators can design these NFTs to pay lifetime royalties or even generate entirely new streams of revenue through the sale of sublicensing rights.

And all this is but the very beginning!

#IKONIC #CRYPTO #BSC #BINANCE #BITCOIN
https://www.ikonic.gg/