 Wijk demonstrated that the oil price and the Nikkei index had a negative impact on Bitcoin price; as a result, this may have a negative impact on Bitcoin price volatility and Bitcoin price and value around a specific time period. Wijk, on the other hand, demonstrated that the Dow Jones index had a beneficial influence on the price of Bitcoin in both the short and long run. According to Palombizio and Morris (2012), the oil price is one of the primary causes of cost and demand pressure, which may result in a drop or increase in Bitcoin price and volatility. Other research evidence in other studies have indicated that there are connections between changes in gold and oil prices and volatility in cryptocurrency values. Due to the supply restriction of PoW, a rise in transaction demand causes an organic increase in fees. This cost rise, in turn, encourages validators to join the PoW network. The PoW network growth then worsens network latency and delays the validator agreement procedure. This delay results in longer payment confirmation periods for users, driving them away from the blockchain platform and toward traditional payment solutions. Crypto PoW payments blockchains cannot sustain large volumes while maintaining a modest payment market share — this is known as the constrained adoption issue. Political events and actions are widely recognized for changing the value and price of Bitcoin and determining Bitcoin price volatility. For example, in the recent past, the trade war between China and the United States, as well as the volatile relationship between Iran and the United States, had an influence on the price of Bitcoin and dictated Bitcoin price volatility. Furthermore, governments have been constantly changing regulations regarding Bitcoins; these circumstances have caused Bitcoin price fluctuations and made Bitcoin volatile at certain points in time; for example, when China decided to halt operations on several trading platforms in 2017, the price of Bitcoin plummeted. In 2018, the cryptocurrency market dropped by roughly a hundred billion dollars within 24 hours of several Asian nations making comments about planned regulatory reforms.
El Salvador's President Nayib Bukele stated on June 5 that bitcoin, the first cryptocurrency, will become legal cash in the country. A few days later, the Bitcoin Law was approved, and it went into force on September 7. Businesses would be compelled to acknowledge bitcoin as an payment for all transactions. Bitcoin price fluctuation, particularly its long-term growth, has been driven to a large degree by a growing loss of trust in traditional fiat currencies such as the dollar, euro, and pound. The growing degree of skepticism and lack of faith in many economies has caused individuals to place greater trust in Bitcoin and other cryptocurrencies rather than fiat/traditional currencies; this has affected Bitcoin pricing and volatility. Many people have lost faith in their country's currency and banking system and have turned to Bitcoin as a means of storing, maintaining, and increasing the value of their money. Previously, paper money was backed by gold. The paper's worth was determined by the restricted supply of gold. The gold was then taken away, and all transactions are now done with paper money backed by nothing but confidence. How much is the paper worth? The faith that people have in it. I'm confident that if I sell you my cow for a piece of paper, I'll be able to use it to purchase a horse. People would not accept the paper in return for giving up a physical asset if they lacked faith we all know trust is required for monetary transactions to take place, anything that affects trust is illegal.
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