Bitcoin is currently the cryptocurrency with the highest exchange rate. At the same time, the cost of bitcoin is demonstrating a rather rapid growth, so novice traders are often interested in whether this phenomenon is related to fluctuations in the dollar exchange rate - the most popular currency in the world.
In fact, the cryptocurrency market develops differently than fiat currencies (dollars, rubles, euros). The market value of the latter largely depends on economic and political factors. In states, such phenomena as deflation, inflation and devaluation are observed annually, depending on which a certain exchange rate is set.
Bitcoin, like other digital currencies that are developed on the basis of blockchain technology, are not tied to the global economy. The price for them is determined exclusively on the basis of the market principle - through the current supply and demand. First of all, bitcoin is quite difficult to mine: mining cryptocurrency requires building powerful computer systems.
Every day, the process of mining bitcoin becomes more complicated, since the construction and closing of each new block of the chain requires more and more power, that is, money and resources. But for the increase in the digital ledger, miners receive a solid reward, so the demand and supply for cryptocurrency remain steadily high.
In 2017 alone, the bitcoin rate soared from $ 1,000 to $ 10,000. This was influenced by several factors. Firstly, more and more large companies and individuals use cryptocurrency to close financial transactions, make purchases and simply make a profit from trading on the exchange markets. Secondly, the difficulty of extracting virtual money has practically reached its maximum, which, together with the growing demand for currency, has led to an increase in its value several times.
More and more people see Bitcoin as one of the most profitable investment destinations. In this regard, many owners of even a small amount of cryptocurrency are in no hurry to part with it and try to replenish their accounts, waiting for the right moment to sell on the foreign exchange market. Thus, the investment value and growth of assets are becoming another important factor in the formation of the rate of bitcoin and other similar currencies.
It is worth noting that blockchain technology served as the basis not only for bitcoin, but also for several other virtual currencies. For example, Ethereum, Dash and other developments are gradually catching up with it. It is the emergence of new cryptocurrencies that makes noticeable changes in the state of the market: new areas for investment appear, the production of new virtual money requires fewer resources, and therefore, bitcoin and some of its analogues may gradually lose value. Thus, the world of cryptocurrencies has its own rules, on the formation of which the dollar has absolutely no influence.
