# Which factors influence Bitcoin trading now?

By [Cosmos](https://paragraph.com/@cosmos-5) · 2022-04-10

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Bitcoin now shares more in common with traditional assets than in its early days. Increased adoption in retail, finance, and politics means even more factors affect Bitcoin’s price and trading. Institutional investment in virtual currencies is also growing, giving speculation a bigger role. These points mean that the factors that affect Bitcoin's trading today are often different from those in its early days. Let's discuss some of the largest ones.

1、Regulation is now much more present than in Bitcoin’s earlier days. As governments begin to understand cryptocurrencies and blockchain technology more, their control and regulatory input tend to increase. Both the tightening and loosening of regulations have their impacts. Some changes in Bitcoin’s price are related to the banning of BTC in one country or its popularity in another.

2、The state of the global economy is now a direct factor in Bitcoin’s price and trading. For example, people living in countries with hyperinflation have turned to cryptocurrencies as a hedge against inflation. As a result of Venezuela’s economic crisis beginning in 2016, we’ve seen record-high trading volume on LocalBitcoins in Venezuelan Bolivar. The 2020 stock market crash saw the beginning of the Bitcoin bull run that lasted over a year. Bitcoin is now seen as a store of value, much like gold. When confidence is low in other parts of the economy, people purchase these assets.

![](https://storage.googleapis.com/papyrus_images/f60660b6a07c761c35492eb00bcab243c433f9e02741365a324b8e214c18db62.png)

3、Increasing mainstream adoption from large companies can trigger rallies in Bitcoin’s price. Paypal, Square, Visa, and Mastercard have all shown some support for cryptocurrencies, giving investors confidence. Retailers have even started accepting Bitcoin payments. The withdrawal of support can also trigger selloffs, such as Elon Musk’s announcement on May 17, 2021, of Tesla halting Bitcoin payments. In this case, the price went from just under $55,000 per BTC to roughly $48,500 that day.

![](https://storage.googleapis.com/papyrus_images/981b60a7dbd182d28cb2f8346b0d1998e0e8511fb5cad0518c7d873d7fb560b8.png)

4、Increased speculation and derivatives such as Bitcoin futures have driven extra demand in the market. Rather than invest and hold BTC for its fundamental value, traders and speculators in the futures market short BTC for profit, causing downward pressure on the price. This means that Bitcoin’s price is no longer solely based on its utility.

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*Originally published on [Cosmos](https://paragraph.com/@cosmos-5/which-factors-influence-bitcoin-trading-now)*