Why does Bitcoin have price differences (why does Bitcoin have large price fluctuations)?

08/13/2023 10:11 • NFT Newsflash • 102 views

Why does Bitcoin have price differences? What is Bitcoin price difference? Why does Bitcoin have price differences? This is because traders need to know if the price has changed at a certain point.

If a user wants to transfer BTC to another address, they must pay a certain percentage of fees to process the transaction, and this fee is collected by the network provider and sent to other users (including exchanges) for settlement. If no user’s funds are frozen or lost, it is impossible to continue depositing funds to this address. So we can generate blocks through a method called timestamp, which can be used as “information transmission” on the chain.

When people buy cryptocurrencies, they use the price difference between Bitcoin and the real world. Therefore, generally speaking, these price differences are caused by the limited network bandwidth of Bitcoin, which leads to large price fluctuations. But for most people, Bitcoin faces such risks due to concerns about market uncertainty and the occurrence of price declines.

To solve this problem, the Bitcoin team has proposed a method: calculating Bitcoin price difference based on Bitcoin’s historical records and current data. There are many explanations for the issue of currency value in the current market-first of all, in terms of price-for example, when you buy a Bitcoin, its value may increase with the change in price, but it does not generate actual value; secondly, from a supply and demand perspective-for example, how much BTC you want to obtain, or how much money you want to receive, and then choose to accept how many US dollars; finally, from the supply side, that is, put all Bitcoins in your wallet for storage. This is one of the reasons for the existence of price differences.

Figure 1: Historical data of Bitcoin-from TradingView.com/en/tx/0xcd6b5ae7c0f2ba4fa8fb3fc9ffed90caead76dbe32bfeaeaebce01f02df20cbda88cbb24f50ec70

Why does Bitcoin have large price fluctuations?

Editor’s note: This article is from Cointelegraph China (ID: CoinTelegraphChina), author: MICHAEL KAPILKOV, authorized reprint by Odaily Planet Daily.

The main reason for the recent large price fluctuations of Bitcoin is the increasing interest in cryptocurrencies. Although the price of Bitcoin on multiple exchanges has fallen in the past few days, Bitcoin is still at a relatively low position.

Over time, many people expect larger-scale price increases. According to Glassnode’s data, Bitcoin has been steadily increasing since June-this coincided with the historical high of nearly $20,000 set in November 2020, and ultimately surpassed the $1 trillion mark. Since early May, Bitcoin trading volume has been on the rise. “If Bitcoin continues to rise above $40,000, it will become the next generation of asset categories.” The daily moving average of Bitcoin also shows this trend: “When BTC starts to decline, it means that the profitability of Bitcoin’s long-term holders is affected; conversely, it reflects changes in the share of Bitcoin investors’ portfolios.” “Currently, there have been significant changes in the Bitcoin market,” analyst Willy Woo pointed out, “Bitcoin is undergoing drastic market adjustments.” He said: “The total market value of Bitcoin has now reached about 80 trillion coins, and the daily average supply of Bitcoin is 7 million tokens.” In addition, he believes that due to “increasing new issuances” and “continuous inflows”, Bitcoin still has the potential to increase by 100 times or more, and may exceed the peak of 2017. Bitcoin spot market traders should note that in early 2019, there were a large number of buyers trying to enter this field, leading some to believe that Bitcoin is a store of value. However, they seem to have overlooked a fact-that the sudden increase in institutional demand may drive its emergence.

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Why does Bitcoin have price differences (why does Bitcoin have large price fluctuations)?

Why does Bitcoin have large price fluctuations?

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