Bitcoin Forum

Hi
All in the title, how the rate of bitcoin is controled? Who decide if the rate will be 1000$ or 1$?

Supply and demand.

Like most of the other assets it depends upon demand (marketcap) and supply (total bitcoin that exist at any time).
You can check https://markets.blockchain.info/ where you can see both marketcap and supply of bitcoin, divide marketcap by supply you will get current price per bitcoin.

So you have been on the forum 2 and a half years and you don't know how the value of BTC is created? What am I missing?????

where:
the exchanges indicate the price.
how:
people who have bitcoin sell it for fiat
people who have fiat buy bitcoin
if there is more bitcoin(high supply) the prices are not fought over as much so either stagnate or fall
if there is less bitcoin(high demand) the prices are fought over more so the prices rise.

prices can be artificially held or moved by putting in resistance walls (large orders to scare other traders from going in that direction)

why:
well that is speculation.
sometimes it can be 1 person with a large basket of bitcoins or it could be lots of people with small amounts that can sell to make the price drop due to high supply.
sometimes it can be 1 person with a large amount of fiat or it could be lots of people with small amount of fiat that can sell to make the price rise due to high demand.


at the moment, lets say $1000.. its been noted that true resistance levels (prices people refuse to impact) is around $600ish. the other $400 is the speculative area that can move up or down for any random reason.

no one can predict what the price will be , but some large players can use their funds to cause a price change for no reason anyone else could understand.

NOO

the price is based on whats available on exchanges.
not all 16mill coins are on exchanges

it has nothing to do with market cap.

EG an exchange may only have 100k of coins on the order lines. and trades are done based on the coins on the order lines.
the market cap $$ is calculated AFTERWARDS, based on the price of what the small order lines are selling at.. not the other way round

No one could control it and no one could able to manipulate its price because movements really depend on the supply and demand of bitcoin.If adoption is increasing and people are already using it then demand do increase and asking for more supply of bitcoin which makes the price increase.

Now watch this thread get rehashed what you answered in 3 words but with life stories connected to it and not forgetting them pweety ittle signatures.

Interesting information, many users will benifit from this information.

Can you give example on how to calculate marketcap? And how supply is counted?

Yes but how blockchain, btc-e, coindesk and others calculate the rate ?

Blockchain and coindesk will just look at the price of the individual trading platform through api and display that data on their site. While btc-e like trading platform shows price at which bitcoin was sold or bought at that particular time.

What about blockchain?

Sometimes big whales do manipulate price but we don't pinpoint exactly when it is a real demand and when it is fake demand manipulated.

No, they won't, because as franky1 pointed out the answer is incorrect!


You quoted the answer yourself.

Yes, i notified that after reading franky1's answer.

I did some searchs and found that blockchain get the rate from differents API services.

As pointed by piloder:
https://markets.blockchain.info/

3 words say it all :D But I still don't get it much, if you said that it's because the demand for bitcoin is on the increase, then why does the price fluctuate so rapidly and uncontrollably like never before? I think it must have a steadier growth than now, as all I can see from the minute-by-minute updates, the price changes every minute and the second before it was still high and one minute after it plummeted.

You answered your own question. From minute to minute the demand from traders and dark web users and normal people etc changes or would you expect them to buy steadily and not as an when is needed. The market only has so many coins on exchanges so it is easy for market makers to give the illusion of big demand or big supply needing to be sold when really there isnt, as is happening now.

if you're asking about supply in regards to the price of a single bitcoin.
you have to check the supply of bitcoins on the order line of the exchange you are look at the price of...
each exchange has its own supply of coins in reserve and each exchange has its own bitcoin price

if you are asking about the market cap $ statistic.
this is an ESTIMATE statistic based on whatever site your looking at getting an average bitcoin price from multiple exchanges. and then multiplying that average by the total coins ever created.

the $$ market cap is a statistic.. it is not a true value. there is no billions of dollars attached to all the coins in existence.

the $ market cap and the exchange price are two separate things.
the $ market cap statistic is an after thought and not important

Demand and supply influence the price fluctuation. most of the market cap pricing are involved in bitcoin exchange. Sometimes there are pumps in the coin but is temporal.

It isn't controlled.

Is 100% due to supply and demand.

The rate of bitcoin depends on the supply and demand, no one controlled its rate as you think. The value goes higher because the demand goes higher. It is also because of the wide adaptation and popularity. Once it gets more popular, many people will use it; the community will get bigger and the development will rise.

Then the rate depend from a website to another.

BTC-E, BITSTAMP, BLOCKCHAIN ... all have different rates.

Many thank's for this clear answer.

That is absolutely true because in a free market if you are able to invest then we will be able to control bitcoin's price levels. At the same time our control will not sustain for long as anyone else will be having more investment than us to take control from us.

It is a free market and we all control it.

actually it is controlled. to a certain amount.. and done so by people. rich people with all the trading tools

it is impossible to arbitrage from one exchange to another near instantly for regular folk.
there are bitcoin confirmation delays
there are fiat bank wire delays

so knowing this. ask yourself
how come the different exchanges sheep follow each other up and down so fast.

the answer is that the exchanges themselves have mixed reserve they work with.
this is using probably the blockstream 'elements' system where only the exchanges get to arbitrage behind closed doors, instantly

5 years ago mtgox and btc-e had something similar where bitinstant was the arbitrator tool.

so while usual traders are depositing funds to make orders minutes later. the exchanges have already put their large orders in to play the markets and basically sheep follow each other near instantly and get to be first place inline for the best prices

I feel like a retard after reading this thread. This can't be life.

I couldn't agree more, I'd also like to add that the demand and supply can also be artificially created by the powers that be to scare off traders in one direction or the other.