Have you watched the price of Bitcoin rise and fall, wondering how it came to be that figure? You may think the price of Bitcoin is a unique anomaly with numbers plucked out of thin air, but you will be surprised at how closely it relates to regular currency, following the laws of economics.
Think about the price of tomatoes and how the price varies from one time of the year to the next. The buyer and seller have to agree on a price. The buyer might want tomatoes for $5 a bag, but the seller wants $6. They can meet in the middle, and the rate is $5.50. However, if there are fewer tomatoes or people want more than is available, the price might go up a lot more.
Believe it or not, the price of Bitcoin can follow the same lines, with a need for a Bitcoin calculator necessary to work out the USD to BTC rate at any moment. The same concept applies to your everyday money as well. If you used a BTC calculator to see how much you would need to pay in USD to buy Bitcoin, you would know the amount would differ each day. The USD dollar fluctuates too, although not as dramatically as the price of Bitcoin.
How to Calculate the Price of Bitcoin?
If you are buying Bitcoin, you may not know how much money you need. That’s where a Bitcoin calculator comes in handy. If you search “BTC to USD calculator” in your search engine, a converter will come up for calculating. You can then see how much the USD is worth, and the price of Bitcoin to that dollar value as well. As of December 6, 2018, the price of Bitcoin as measured by a Bitcoin calculator is $3,716.87 to one Bitcoin.
Why Does Bitcoin Rise and Fall Dramatically?
As explained above, the price of Bitcoin follows the same laws of economics as a bag of tomatoes, but why does it fluctuate on such a dramatic scale? Bitcoin is worth as much as what people are going to pay, but cryptocurrency exchanges such as Coinsmart attract day traders who tend to have more of an impact on the price. This is because they can set up their accounts to buy Bitcoin when it reaches a certain price, so there can be an influx in people buying or selling at any one time.
Calculating the price of Bitcoin can happen at the press of a button on a Bitcoin calculator, which makes it effortless to know when to buy and when to sell. Join a cryptocurrency exchange and try it out for yourself!