Summary
The price of Bitcoin, like other assets, is determined by supply and demand dynamics in the market. There are several factors that contribute to the constant change in Bitcoin's price, which will be discussed below.
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Table of contents
Factors that contribute to Bitcoin's changing price
The factors discussed below contribute to the changing price of many asset classes, not just Bitcoin's.
Market Sentiment: Traders' and investors' perceptions of what Bitcoin should be worth can change rapidly. News, social media, and public opinion can influence market sentiment. For example, positive news regarding Bitcoin or cryptocurrencies in general can lead to an increase in buying activity, while negative news can lead to selling.
Speculation: Many people buy Bitcoin with the hope that its value will increase. Speculative trading can cause significant price volatility as traders buy and sell based on short-term price movements rather than the inherent value of the asset.
Supply and Demand: The total supply of Bitcoin is capped at 21 million coins. As more people become interested in Bitcoin, the demand increases. If demand exceeds supply, the price goes up, and vice versa.
Regulatory News: Government regulations can have a significant impact on the price of Bitcoin. For example, if a major government announces a crackdown on cryptocurrencies, it may lead to a sell-off.
Economic Events: Events such as financial crises, currency devaluations, or economic recessions can influence Bitcoin’s price. In some cases, Bitcoin is seen as a "safe haven" asset, and money may flow into it during economic uncertainty.
Technological Developments: Technological advancements within the cryptocurrency space or Bitcoin network (such as upgrades or forks) can also affect the price.
Market Liquidity: In a market with low liquidity, even small trades can have a significant impact on the price. In the early days, Bitcoin markets had relatively low liquidity, but as the market has grown, it generally takes larger trades to move the price significantly.
Competition: The presence and performance of other cryptocurrencies can also affect the price of Bitcoin. For example, if a new cryptocurrency is gaining attention and investment, it could lead to a decrease in demand for Bitcoin.
Macro Factors: Global economic indicators, such as changes in interest rates, inflation levels, and political stability, can also impact investor sentiment towards assets like Bitcoin.
How to check Bitcoin's current price
You can monitor Bitcoin's real-time price and other cryptocurrencies on our Markets page here. Use the calculator to estimate how much Bitcoin you’ll receive for a specific amount in dollars (or other currencies). Keep in mind that the actual amount of Bitcoin received may vary due to fees.
If you’re using the Bitcoin.com Wallet app, tap on Discovery. Under the Markets tab, you can track Bitcoin and other cryptocurrency prices directly from your device’s Discovery screen.