This poses a problem for the use of Bitcoin as a means of payment
Which buyer would like to spend bitcoins today on the assumption that the purchasing power will be 20% higher tomorrow?
Which trader would like to accept the bitcoins today if the value could be reduced by 40% tomorrow?
There are currently two requests for Bitcoins that are responsible for the price increase:
Demand for a speculative object (currently the main price driver!) And the
Demand for BTC as a means of payment.
Let’s take a look at the factors influencing exchange rate volatility at a high flight level.
Supply and Demand and Trading Blog
It is obvious. Bitcoins are limited to 21 million pieces. Only 12 million were put into circulation, some of which have already been lost forever (private key lost, e.g. due to hard drive crash; Interesting side question: What will the FBI do with the 144,000 confiscated Bitcoins? These are now worth> 90 million EUR and are located here ). The demand for the scarce commodity BTC is increasing and with it the price.
The market is not “deep”
Although the BTC market capitalization is around USD 10 billion (12 million BTC at a price of USD 850 / BTC), the percentage of BTC shown for trading is only a small fraction of that. For a sedentary fund manager, a market cap of $ 10 billion is a joke. A high-volume buy order eats its way through the outstanding offers and drives the price up immensely. Conversely, high-volume sell orders cause the price to drop sharply. Bitcoin behaves like a “penny share” here. Volatility is typical when market participants place orders in the millions, but the underlying market liquidity is comparatively low. After the …