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How the bitcoin exchange rate is determined?

In contrast to "traditional" currencies, the bitcoin isn't backed by anything; it has no regulatory authority, is not linked to any government or economy, and has no physical embodiment. The price of a cryptocurrency is determined exclusively by market supply and demand. The more profitable it is to use bitcoins as a means of payment, the higher its price will be.

What is special about the fluctuations in the price of the bitcoin is that nobody knows how many bitcoins the major owners of cryptocurrencies (pumpers) have. The situation on the market can be heavily influenced by a small amount of people, by selling a large amount of cryptocurrency, for example.

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