How Bitcoin Is Valued?

Bitcoin is a digital coin not issued by any government or legal body like some currencies like dollars, rupees, euro, etc. To create or store Bitcoin you need to use the dispersed network of users and some cryptographic protocols are also required. Satoshi Nakamoto was the first to introduce the cryptocurrency in 2008 and was later put into action in 2009 January.

What Determines The Bitcoin Price?

  1. Supply and Demand- This is similar to the background of economics where the price of a commodity depends on supply and demand. When the price of a commodity rises it is due to less supply and more demand and when the price of a commodity decreases it is due to more supply and less demand similarly Bitcoin prices go high when there is more demand and less supply.
  2. Competition and news- Now Bitcoin faces competition from the altcoins like Ethereum and meme coin dogecoin. If they face lower prices due to more supply automatically Bitcoin prices need to be low or else even if there will be demand there will be fewer sold bitcoins due to higher prices than the competitors. Remember everyone needs to make more and more money in many ways possible.
  3. Cost of production- The production price is high if there is less availability of mining infrastructure, electricity for mining, etc. Responsible for this can be BTC algorithms as well.
  4. Regulation- If some countries ban Bitcoin like china did, It banned the bitcoin so prices instantly fell due to such huge investors losing their money and eventually the Bitcoin lost its value and fell.


Remember before investing in Bitcoin you need to understand that prices are very volatile and there are instant highs and lows as the market cap is itself very small compared to other industries Social media these days also driving the value down and up many times due to news related to these kinds of stuff so be careful. Bitcoin is a relatively new market and its use has been recently before coming into action about these things you must be taking good legal advice from an expert before starting to invest in these kinds of stuff.

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