Home » Factors Influencing Bitcoin Investment Returns

Factors Influencing Bitcoin Investment Returns

Table of Contents

btc coins btc dip Bitcoin ETF

Do you want to invest in Bitcoin but wonder what will influence your returns? If so, here’s what could affect your Bitcoin investment returns. 

Understanding Bitcoin and the factors that influence its market fluctuations and value is not easy. Most people know that Bitcoin and other cryptocurrencies are notoriously volatile. Bitcoin’s value can decrease or increase by 10% in a single day. Other virtual currencies have wider value fluctuations.

Nevertheless, price fluctuations have not prevented people from investing in this digital currency. Today, people buy this world’s largest cryptocurrency on many platforms. For instance, the Bitcoin Profit receives many new users every day. These people use fiat money to purchase Bitcoins and then send them to crypto wallets where they hold them waiting for their value to increase and sell them for profits. Perhaps, you can visit https://bitcoin-profitapp.com to register and start buying Bitcoin.

Overall, many factors can influence your Bitcoin investment returns. This article highlights some of the critical factors affecting your returns from a Bitcoin investment.

Industry Factors

Several governments are looking for ways to regulate the crypto industry. Consequently, if a government controls the crypto market, it may affect your investment returns. Positive news could affirm crypto trading, thereby assuring investors relevant safeguards like central framework and laws. Ideally, some government regulations could reinforce the investors’ and users’ faith in the crypto market and increase the price.

For instance, cryptocurrency usage increased in India from June 2020 to June 2021 following a repeal of the crypto activities’ ban. Banning or curbing crypto activities can cause panic among investors, dimming their faith in Bitcoin’s future.

For instance, when China banned crypto activities, the Bitcoin market dipped. Overall, government regulations can affect your Bitcoin investment returns significantly.

Risk Appetite

Bitcoin and other crypto-assets are generally precarious. A risk-prone and jittery investor can sell off their asset after thinking about Bitcoin’s prospect due to stringent government sanctions and policies or a poorly performing market. And this could bring down Bitcoin’s price, thereby affecting your investment returns.

For instance, when China imposed a ban on Bitcoin, many investors sold their tokens, leading to a 7% drop in the cryptocurrency’s value. However, investors can purchase this cryptocurrency if they are optimistic about its price.

Bitcoin-Specific Drivers

These factors are specific to this cryptocurrency, depending on its market and blockchain services. For instance, some people see Bitcoin as digital gold. Economic inflation and central bank regulations don’t affect Bitcoin. Its price fluctuates mainly due to demand and supply. Ideally, high demand for this virtual currency will increase your returns when you invest in it.


Bitcoin is new to most people. When the media disseminates accurate information, its value may increase or drop as more people learn about Bitcoin. Ideally, sharing information about Bitcoin can popularize it and prompt more people to purchase and use it. Also, discussing Bitcoin in the media can boost confidence about the cryptocurrency and its underlying technology. And this can increase its price while growing the market.

Factors Interconnections

Understanding the interconnection of these factors can boost your understanding of Bitcoin’s performance. In its highly speculative and developing phase, risk appetite among investors drove the cryptocurrency market. However, risk factors now have a short-term influence on Bitcoin’s price. Today, cryptocurrency-specific drivers are dominants influencers of investment returns.

At the same time, government regulations and institutional adoption have dominated the crypto market and investment returns significantly. Therefore, monitoring how institutions embrace Bitcoin and the approaches governments take to regulate the crypto industry will help an investor determine the best move to make. Thus, being diligent and researching the market will ultimately influence your Bitcoin investment returns.

Jonathan Gibson

Jonathan Gibson

Table of Contents