Every minute there is the birth of a new cryptocurrency interested individual. The decentralized network with the fascinating, invisible coin is like magic to many people. Bitcoin has reached the peak-of-the-Everest popularity, and it has the eyes of investors lusting for it.
However, it is crucial to know about the different cryptocurrency exchange platforms. Many cryptocurrency exchanges are available in the market, and some of them provide traders with understandable fees for Bitcoin exchange.
The exchange rate of Bitcoin is constantly changing. This article contains information about Bitcoin exchange rates and how they have changed throughout 2021.
Bitcoin Is Highly Volatile
Bitcoin, as well as other cryptocurrencies, are highly volatile. The primary reason for this particular nature is that Bitcoin and the other cryptocurrencies are very new and are recently born modes of business investment.
Some people are taking bitcoin seriously, while some are only using it as a quick way to accumulate money. Some are only experimenting to see the way the value of cryptocurrency fluctuates. These are some of the main reasons for Bitcoin being very volatile.
Bitcoin Exchange Rates
In 2021 the exchange rate for bitcoins has increased immensely. In January 2021, Bitcoin price reached $40,000 January 2021. The price increased again in February, reaching $50,000 as the top price in the month.
By 25th March of 2021, the value of Bitcoin was $44,000, but that price skyrocketed, reaching $64,000 as the all-time high price for bitcoin. Here is a table containing the change of Bitcoin exchange rate throughout the month ends of 2021.
Determining Factors Of Bitcoin Exchange Rate
There are some determining factors of the Bitcoin exchange rate. Here are some of them-
- Government interference may make it very significant or even illegal to use bitcoins. The government could enforce new laws to change the direction of bitcoins.
- A single investor also may change the order of bitcoin or other cryptocurrencies. Elon Musk, for instance, has significant influence over bitcoin. His tweets hike up the price of cryptocurrencies sometimes.
- Bitcoin whales or the early investors of bitcoin who have a massive amount of bitcoin in their possession may change the direction of bitcoin significantly with shocking transactions.
- Bitcoin is definitely on the top when we judge the price, but there are other competitors of bitcoin that are slowly and steadily catching up. Ethereum, Tether, Cardano, Polkadot are some of the competitors of Bitcoin. Any of these cryptocurrencies may dethrone bitcoin someday.
What Is Bitcoin Exchange?
In general, a bitcoin exchange for cryptocurrency exchange platform is a platform where the clients can buy cryptocurrencies and sell them using other cryptocurrencies, fiat currency, or other digital currencies. The exchange platforms, however, charge a small amount of transaction fee for each transaction.
Some of the most popular bitcoin exchange platforms are Coinbase, WazirX, Binance, Bittrex, Etc.
Many cryptocurrency traders buy bitcoin from one platform and sell it to another and earn some profit. This process is called crypto arbitrage. According to the governing authorities, there are two types of cryptocurrency exchange platforms; centralized and decentralized.
How Does Bitcoin Exchange Work?
The trading and transactions of bitcoin are recorded on a distributed ledger, and there are few steps for trading bitcoin on any cryptocurrency platform. Here are a few steps on how the bitcoin exchange happens on any platform.
- People interested in bitcoin trading need to get themselves registered to an exchange platform. One can choose an exchange based on their preferences.
- The second step involves downloading the exchange and creating an account after fulfilling KYC, mobile verification, and email verification.
- After setting up a password, the user can enter the world of cryptocurrency exchange.
- Bitcoin exchanges allow bitcoin traders to buy and sell bitcoin through different methods like UPI, bank transfer, or by using debit or credit cards.
How Do Bitcoin Exchange Set Price
This is a misconception to think that the bitcoin exchanges set up the price of bitcoin. No exchange platforms set up the bitcoin price. Instead, the price of cryptocurrencies depends on the buying and selling activities of the customers.
The exchange platforms determine the coin prices based on the trading volume and the supply and demand of certain cryptocurrencies.
Bitcoin has always been the most costly cryptocurrency. The current price of bitcoin is $63,940.30 in October 2021. Different exchange platforms provide different services, but the price of bitcoin remains the same across different exchange platforms.