$BTC What factors influence the price of Bitcoin?

In general, supply and demand depend on several factors. Economic events, including declines and increases in prices in the stock and bond markets, as well as global events such as the coronavirus pandemic and Russia's war against Ukraine, can affect the demand and supply of the things we value. This is compounded by regular economic cycles, which include phases of inflation, stagnation, and recession, forcing governments to take measures to try to maintain the value of a currency.

However, unlike fiat currencies, which are subject to government monetary policies, the Bitcoin ecosystem is a completely decentralized monetary system, meaning that no central authority regulates the currency, and the creation of bitcoins follows the rules of the protocol in a process called mining.

Since the creation of the first block, all transactions on the Bitcoin network have followed a precise and unalterable process. Miners create new blocks by solving a mathematical puzzle, and new bitcoins enter circulation. The only provision of the Bitcoin protocol that involves a change from time to time is the amount of block reward that miners receive in a process called Bitcoin halving. It refers to the halving of the block reward value every 210,000 blocks or approximately every four years. The goal of the halving is to decrease the amount of new coins entering the network.

Halvings can affect the price of Bitcoin. As rewards are halved, new bitcoins become scarce, and this scarcity often drives the price up, although this is by no means a certainty. The price of Bitcoin is also influenced by similar supply and demand factors listed above.