Bitcoin Forum

Since its inception, Bitcoin has had a fluctuating price, with its initial price being $0. Bitcoin's price has demonstrated a tendency to increase in value rather than decrease, which has led many people to view it as the ultimate store of value despite the cryptocurrency's repeated crashes.

And yet, after numerous crashes, how has Bitcoin managed to grow over time?

https://i.imgur.com/BMdVucL.jpeg

The price of Bitcoin is mostly driven by DEMAND. The value of bitcoin will rise as long as demand is growing. In addition to surviving to recover from repeated collisions, it has also continued to expand and scale new heights.

Source : https://www.makeuseof.com/why-is-bitcoin-going-up-cryptocurrency-rise/ (https://www.makeuseof.com/why-is-bitcoin-going-up-cryptocurrency-rise/)
Source : https://www.investopedia.com/tech/what-determines-value-1-bitcoin/

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Aside from market DEMAND, there are also several key factors affect Bitcoin price over the years namely:

• The supply of Bitcoin
• The cost of producing a bitcoin through the mining process
• The number of competing cryptocurrencies
• Regulations governing its sale and use
• Media and news

https://i.imgur.com/Svlb9lG.jpeg

Source : https://www.investopedia.com/tech/what-determines-value-1-bitcoin/ (https://www.investopedia.com/tech/what-determines-value-1-bitcoin/)


[moderator's note: consecutive posts merged]

The news does well to draw in new people every time we're near a block halving (either by people getting excited about the halving or because the price has grown well).

A lot of returners probably sit on the sidelines to watch, wait and probably buy and hold a bit. With each halving comes new news about the inflation in bitcoin being reduced and by the next halving it'll be lower than most if not all fiat currencies.

I agree with the op that the crucial part is demand. While it might seem in the bubble of this forum that Bitcoin is very well-known, so many people have been using it for years and things like that, let's not forget that only up to 2% of the population use Bitcoin, so it's very far from being highly adopted, and we're still, regardless of how much publicity Bitcoin got over the years, are at early stage of adoption if we assume Bitcoin will become as widespread as smartphones or the Internet.
As for the news, they can affect short-term Bitcoin trends, but I don't think they are a significant case of Bitcoin's overall growth over time. Also, I think the media largely publish what would be relevant for their audience, so if they cover Bitcoin, it's also about the demand for such coverage and is thus covered by the first cause.

There is something more important in Bitcoin's price evaluation which is the network itself.
A miner mines a blockchain which includes multiple transactions and it gets rewarded on that basis.
Every halving, Bitcoin's mining reward goes down by 50%, and to keep the network active, Bitcoin's price needs to adjust itself so that miners are still in profit.

And all these things increases demand near the Bitcoin halving which also results in a jump of price.  ;)

Yes, it's driven by demand and also, the consumption of electricity for it to maintain the network is its back-end. That's another contribution to its value that it has right now.
The reason why many bashers bitcoin has is that they cannot stop its growth. The reality is sinking in that bitcoin is bound to get up and with the halving that it has every 4 years, it'll make its price even higher.

You could argue that every asset value in this world is driven by demand. In other words prices go up when there are more buy orders than sell orders for a certain price.

However there are other factors which determine the increase of Bitcoin's demand which I think is worth investigating for an investor and user of the cryptocurrency. But I think most of the demand is generated by people who are considering BTC as a reliable store-of-value instrument.

Because bitcoin is the first and also the oldest cryptocurrency that managed to attract the attention of the internet world, it can replace open source currencies, besides that the demand for bitcoin is also limited.

bitcoin continues to grow and has also succeeded in attracting the attention of many people and even various groups, institutions and fund managers to start investing in bitcoin, because it is believed to be profitable and also able to store more value than gold.

Yes I agree, thanks for noting. I believe Bitcoin was the first application of blockchain and Bitcoin would not exist without blockchain.

Yes, many still don't realize that it's the cause of the bull runs. Whether we're having institutional adoptions, this is what they're also basing with their decisions.
Just wait and see because when we're closer to the halving, this is going to cause many institutions going to have some sweet words again about bitcoin.

Yes, we have seen a steady growth in the Bitcoin price, since it has been released ....but it is not a guarantee that it will continue on the same trend. In theory.... the Bitcoin price should continue on this trend, because it is designed on the principle of scarcity ...like other commodities for example Gold.

The problem is, scarcity does not guarantee a high price, if there are no demand or use case for it. We have to make sure that there are a constant demand for bitcoins, by supporting the retail outlets and shops that accept Bitcoin as a payment option. (Do not just hoard your bitcoins... use some of it... and keep buying more)  ;)

It's what people think about the future of bitcoin.

If it's only due to real demand, then the price is already stable now.
look at the price movement of bitcoin, it's very volatile, that's because it's an speculative asset and we are not yet in the stage that real big demand is happening.

But Bitcoin can still decrease in value when unexpected things happen to Bitcoin that can cause Bitcoin holders to be afraid so they choose to sell all Bitcoins even though after everything is normal, they will also buy Bitcoins again. In this case I agree with what you say, because Bitcoin is indeed a very good investment and also Wise and has the potential to revolutionize the world. But you can also compare the current value of Bitcoin with last year where the difference is very far, even though in general Bitcoin will continue to be scarce.

Bitcoin price manages to grow due to many aspects. Most of them have already been mentioned and despite the fact that demand plays important role now, there is one other key aspect that is the predictable and small increase of new supply. This small increments of supply makes it way harder to debase its value just like what happens in fiat money!

Other than that, you just need to learn about sound money, and all properties of sound money are in Bitcoin, therefore, nothing else could happen other than a value increase over time!

So let's have a fork in which we don't halve the reward but cut it by 1/10 so the price will somehow manage to do at least  1000% every halving.  ;D

It's a complete misconception that every miner has to make a profit, that there is an average  "bitcoin cost" and that somehow the price will forever offset the diminishing block reward. Bitcoin mining will be profitable even at 1000$ just how it was 6 years ago, it's not a thing like any other industry, if somebody goes bankrupt you get a bigger pie of the rewards with the exact cost, and you don't have to increase production to offset the balance you don't have to do anything.

The only thing that is changing every day with every move is the security of the network and the amount of $ you need to attack it.



All of them are components that trigger demand, they are not independent of it or standalone.
The number of competing currencies affects demand, the regulations and usage affect demand, and media and news trigger demand for coins.All those "key" factors affect demand, and the only thing that affects the price directly is demand and offer.

You can have the media show things about the advantages of bitcoin 24/7 if there won't be any demand for the coins, news won't affect the price at all.


There is no arguing about it, every single thing in this world is driven by demand and offer unless you have a government intervention restricting the free market and either forcing or subsidizing the price.

Supply and demand does not make price peaks and all time highs. I don't deny supply and demand works but it does not work and affect price at peaks and all time highs.

Peaks and all time highs as well as lowest price of each crash are made by leverages, liquidations (forced liquidations), not by supply or demand.

Bitcoin has many characteristics that makes it unique in crypto market: truly decentralized when satoshi abandoned community, most healthiest network from its sum hashrate to how its distribution in miners at different locations. Total supply is 21M and can not be created more. Proof of Work contributes to make Bitcoin value.

Important that Bitcoin has very many use cases and I can say it has most use cases in crypto.

It's pretty simple in my opinion, bitcoin is filling a gap in our lives. That gap is the need for a decentralized money specially when the centralized money with the corrupt banking system is failing us. Logically anything that is useful or in other words is solving a problem, becomes useful and keeps growing.

This is the same with any other technology and innovation.

Price Fluctuation: Demand and supply, Price increase demand. Cost of production and number of competitors gets appreciated with high demands. Regulations and media coverage is subject to how the Bitcoin investors react to this news in which the outcome result in demand or supply . Each have this interwoven relationship making everything around prices  fall back to demand and supply which understanding how they are formed can become a powerful tool in predicting future prices

I think Bitcoin will have to continue the same trend which is the 4years cycles as people said because it was designed to operate that way, to prevent inflation, new market entry and new ATH.

I think I'm with what you said because when there's a scarcity of an object the price of the object will always go up. About making sure there's a constant demand for BTC, I believe BTC has passed the level since the institutional investors have joined the game and alot of people are hoping to hold a whole BTC.

"everything is driven by demand" is too simplistic.
its understanding what drives the demand.
which is its utility.

too many people think its just price vs price where there is no fundamental logic or utility need for it it. where people just fight because of a supply/demand thing..

no.. something can have very limited supply but not have any utility. or need.
something can increase in price even when demand is low too

imagine there were 10 people each with only $200 to spend per year. (demand is the same each year)

however in year one there is only 10 items of needed function and utility. and so price is 1 item per $200
however next year demand does not increase. instead the items are only 5 items of needed utility
each person only gets 0.5 for $200 meaning 1 item per $400

its not all driven by demand. its driven by many factors.

the reason people want bitcoin is not simply because someone else wants it(demand) its because they themselves see utility in it, a need they see fits their life, a purpose it solves in their life, an expectation they see it fulfilling in their life.

also theres things like how can they acquire it.
some can mine for it. which does not impact the price market because they are not buying on a market
some decide its cheaper than their regional mining costs to buy it and so they do.
this is not "demand" this is supply. and not scarcity supply. but instead cost supply of method of acquisition.
some people also set up stores and sell goods to acquire it


peoples hopes, desires, needs, and purpose for wanting bitcoin and method of getting bitcoin is not all simply the silly high school economics 10minute lesson of "demand".. there is more to it

 I will come directly straight to the question asked in OP, And will try to give a straight forward answer.
The reason is very simple why Bitcoins grow over time.
For more easy to understand, you can consider Bitcoins as a gold. Bitcoins are limited in supply. So when the demand increases the supply becomes less and hence the price rises.
And as the time passes by, more people come to know about Bitcoins and therefore increasing the demand to buy it.
Hence when the demand of the coin increases, more people try to buy it in exchanges and therefore, the price rises.

Of course demand actually has a role to play in the price movement of Bitcoin, because I got to understand that the price of Bitcoin is inversely proportional to it's demand, that is, the higher the demand, the higher it's price increases in other to allow only those who could afford it get. And likewise government policies just in the case of Russia which was restricted from all international trades, social media hype and news. All these play a big role to the price of BTC

Its the simplicity and safety that block chain transactions can provide over the fiat which became the prime reason why bitcoin kept on rising and why we say to hodl it as it will rise further.
Blockchain technology can create digital contracts which can allow for  use of distributed ledger system making it a decentralized currency, Thus creating a better alternative to fiat currencies. All these advantages make bitcoin a truly safe and meaningful digital currency. Thus as the adoption increased its value too zoomed.

Is it that simple?
More precisely, the greater the level of trust shown by investors in the community because the offering of the benefits that Bitcoin provides provides freedom that is not offered by any other party in terms of investing finances. At that time policy was still loose and Bitcoin staged an interesting rally. Finally from there the seeds of adoption began where people turned to Bitcoin on the basis of freedom in terms of ownership of investment assets.

from that picture, you have shared that bitcoin pretty much hame the same thing as gold does. can fight against inflation as well the only hard problem in my opinion is regulation for the government the demand for crypto is increasing banks and institution started to adopt it the crypto ETF is dozen out there so this is good sign and i think it will grow exponentially over time.

There's such a thing as punctuations. And they matter. A lot.

I don't think government regulations are a hard problem for Bitcoin. Bitcoin has grown this big and popular even if unregulated or poorly or unfairly regulated. If the banks and large institutions are already adopting Bitcoin, there's no reason why governments wouldn't follow. At the end of the day, governments are owned by banks and large corporations and companies.

I agree that demand is the crucial part but I would also highlight the supply of bitcoin which is limited and is one of the main reasons for the value of bitcoin which over time will increase.

in some countries it is not a difficult problem, but for countries that do not legalize bitcoin this can be difficult, because there is no support for bitcoin. Even in a developing country like mine, bitcoin does not get full support because it is only regulated as a commodity tool and nothing more.
Bitcoin is growing and growing in popularity, but there is no guarantee that it will be fully accepted.

Back to the OP's discussion about the increase in the price of Bitcoin from time to time, because bitcoin only has a supply of 21 million and will not be printed anymore and there are many communities that do support bitcoin. Bitcoin is still number one even though today many new altcoins are emerging and claiming that they are better than bitcoin. supported or not supported by the government, Bitcoin remains number one and is growing over time.

Bitcoin became a financial instrument that investors and financial institutions used to store value and generate returns. As a result, derivatives have been created and traded by investors. This influences Bitcoin's price. :D

I agree to OP but to be more specific, i.e demands from new people. Personally people can increase their demand and vice versa, but if the number of users does not increase it will not be able to take bitcoin to a higher level. Its massive adoption in recent years has brought a new level of bitcoin usage and each user means adding one more demand permanently.

There are probably many users here who are living in countries where Bitcoin is not legalized. But they are still buying, selling, and converting Bitcoin to their local fiat currency. They're probably even spending Bitcoin.

Bitcoin doesn't need any support from the government in order for it to be adopted by its own people. Bitcoin is already what it is. It doesn't need to be regulated in order for it to be worth trusting and hodling.

I think this is on another side. There are some people who only use Bitcoin just for a transaction or using it as payment, while there are some people who are just using it for investment, store of value, they bought Bitcoin for investment.
I believe that massive adoption and will grow naturally, transactions on the Bitcoin network will grow as time goes by because every day there are new people being introduced to Bitcoin.

but in general, in my country bitcoin is not getting adoption. It is true, bitcoin can be adopted by its own people without the need for support by the government, but if it is used as a legal medium of exchange for goods and services it would be against the law.
buying, selling and converting to Fiat is included in Commodities and that's all.
It's certainly better than in china, which completely bans bitcoin.

but the more who influences the price is  the support of people inside bitcoin and now altcoins losses its momentum because of continues dumping in crypto.

and it is not overtime but its 12 years now so there is nothing to prove from bitcoin side , as it has been given without a doubt.

but the accommodation of bitcoin from all institutions and all who buy ? is now still in the best   for long term holding lol.

Basically, it showed people that bitcoin is to be trusted always. That’s how you grow as a stock, share, gold, fiat, or crypto. If people think that investing into something would make them richer than the inflation pace, then they would invest into it.

I believe that if I invest into bitcoin, I would be richer in the future and that is why I invest into crypto. This is how you make money and I believe it is very important. This is how I got richer, and this is how some people became millionaires and I believe that we should not be refraining from trusting it as well. If you do keep on trusting it, then the price of it will end up going higher and higher as well.

With time people realized that they need a decentralized currency because the government started failing slowly, the inflation rates were high and the security was extremely low with banks shutting down around the world, people saw the market and decided to jump onto a non- traditional asset, Bitcoins, the more people hogged on the more the value grew ultimately causing a straight forward rise in the whole system. Other than that it caught the eye of huge whales and for them manipulating this market was easier since they didn't have any rules ! They were also not governed by policies and their privacy was almost hidden as well, what not to invest in?

I so much like this picture of graphical representation of bitcoin evolution and price differences. That is why when people always use monthly, weekly, daily or even hourly chart to judge bitcoin, I always tell them to zoom out and see how bitcoin has fared for years.

That graph is showing that bitcoin has been on the bull since it was created and it most importantly shows the ability of bitcoin to recover after severe dips. For instance the 2014 price slump qnd later back ro $315. In as much as charts doesn't lie, bitcoin has given us enough reasons to believe her.

Ofcourse, demand is one of the most important factor, and then supply. Price won't naturally go up if there is a strong demand for oranges (for example) whereas more oranges that's greater than the demand is produced/supply for consumption. So, Bitcoin price is dependent mainly on demand and supply. And to create sustainable demands you need a steady increase in the number of good uses for more bitcoins on daily basis.

We cannot deny that we need support from our government. We cannot convert our Bitcoin to our local currency if the government totally bans every activity related to crypto and Bitcoin. We even won't have a single local exchange if crypto or Bitcoin is not allowed or illegal. For example in my country, Bitcoin cannot be used as a payment tool. If we use it to pay any goods or services, we can be fined or jailed for breaking the law. So, it is untrue that we don't need support from the government. It is like avoiding reality.  :-\

Bitcoin prices have always been fluctuating. The supply and demand keep going up and down and so, there is always a different value of bitcoin that you will get. But if you consider that deeply, you will know that the fluctuations are a reason why we are able to make profits.

This is where most people are really getting wrong and thus use the mentality of fiat currency to use on Bitcoin without paying much attention to the differences and taking a look at previous performance , where the price started,  where it's today and where it's going to be in the future , hence pay attention to the short term volatility without looking at the long run. To actually get it right the 4 years simple moving average would be nice to measure Bitcoin.
 Bitcoin is the Gold of the 21st century in terms of performance.

but on the way bitcoin encountered many obstacles, especially with government regulations. but that is precisely what makes bitcoin more well known, because it went through a conflict and precisely because of the pros and cons of this bitcoin experienced a fantastic increase and finally many people wanted to know about it and study it so that they joined and had a massive impact on its development

In the given list the most important factors that I consider as a threat to bitcoin are the cost of production and regulation.
I wouldn't say media coverage because in this world of internet almost everyone is socially connected and the news are spread instantly across the globe.
Whether it be a positive or negative news the coverage is across the globe.
On the other hand the cost of production and regulation are real threats to bitcoin which causes a correction every time it impacts bitcoin.
All the other factors drives the price of bitcoin upwards.

Regulation is not really a threat to bitcoin. Regulation is not put to bitcoin itself, it's always put to you, the user. Which means that whenever it's put somewhere, the other place doesn't have it. So, let's say they ban mining in Europe, it's still allowed in Asia or USA for example. This is why it's decentralized and why it's liked, because you can't ban everything all at once all around the world here.

FED goes out and says they increase the rate, and suddenly the dollar value increases all over the world, all due to one government organization said something. Bitcoin doesn't have that, no matter what one nation does, the other doesn't have that and that's how it works so well for us.

I don't doubt that cost of production is a factor that influences the actions of market participants (miners especially). Logically when the cost of production grows and the price of Bitcoin drops or remains stable they will increase the amount of BTC they sell to cover their operational expenses. However, because due to the limited nature of the supply the miners' impact on the market will likely drop as institutional adoption increases.

I can assume your statement as my experience exactly like that mining on small scale.

It's tough in these bear market...  I just can't imagine those people who doing it in large scale,  your daily weekly and monthly cost getting spike high while you produce a very small amount of bitcoin...  That's a real and tough challenge but yeah that's one of the fundamental of bitcoin growth in price, we are heading to the next halving with a hope to see at least 500% growth!

Regulations does really impact or could be a threat to bitcoin and it's users. Yes, Bitcoin is a decentralized coin however with the multiple banning being made by different countries affects the value of it as it limits the accessibility of it's depending on banning made by a country. What may have been ban on a country could still be done on another country but it creates limitations as cause trouble for it's users.

Bitcoin managed to grow over time because of the belief and evangelism of the community since its inception.  Add in supply and demand, the tech, proven use case, and its value as a medium of exchange as well as a store of value and here we are, looking forward onward.

Bitcoin is a crypto-currency which grow for itself without anyone support it does not need the government support before it will grow so what therefore I don't think that yes we have to look about how cryptocurrency managed to grow but consider the way of people buying it and selling it because you said elementary way that make me come to grow

Well I think you are wrong here, how can bitcoin will survive if there is no community support as we know bitcoin price was based on the demand and supply that make the price of bitcoin fluctuate. Bitcoin grow over time because of us ^[hodler] that keep believing in bitcoin, the more strong hands hold bitcoin it will become very expensive price, so bitcoin actually did not manage on its own, it was because of us who supported bitcoin from the start.

Since its inception 12 years ago, the price of Bitcoin has gone through the roof. It has been steadily increasing in price over the long term, compounding at a rate of about 100 to 200 percent per year. If you were one of the first people to invest in Bitcoin, you're likely to have made some serious money.

BTC came at a time when the world was more or less on the tail end of full recovering from the last financial crash, and it was the roaring twenties in some aspects as people tend to look into new investment opportunities after being stingy for a couple of years due to the crash and weren't worried about a new crash, at least not an imminent one. Also, the tech investment concept was still going strong and people tend to latch on to any new tech whatever it might be. Will something like that continue, well, that's a different story.

Entire world was in financial crisis. That too might've triggered Satoshi to innovate blockchain technology. Bitcoin came out soon after the crisis, but the same didn't gained it's market. It made itself strong and some realised the real need and its future. One that is given as giveaway now reached an ath value near to $70k. This shows how high the demand have increased over time.

2008 was definitely a reason to create it, but satoshi worked on this for many years before he invented it, that's important. Not like dude just saw the crisis and whipped out some amazing tech right afterwards, that would be impossible.

So, he probably worked on it way before crisis ever happened. Of course, people have been trying to build something like bitcoin for over 2 decades now, this wasn't even the first, so the timing was perfect. He researched previous failed ones, and he improved it and then published it on a period of crisis, all coming together to have a great start. Then we took over from there and made it into one of the biggest investments in the world.

In this case, I will consider it reasonable because the government system is actually very inversely proportional to bitcoin, especially those that put forward the anonymity system and things like this will certainly create various kinds of speculation about the pros and cons there, but I think this is a good thing because it is getting crowded. the more people talk about it, the more people know, and the more people know, the more people realize that bitcoin is not as bad as people say out there.

Bitcoin is a digital currency which nobody can determine its regulation and its achievements. Bitcoin value cameras or accelerate to any value it won't because of the demand and the supply that involved in the market. That is why I always emphasize that nobody should you discourage any investor or anyone who want to buy cryptocurrency during the beer market and also the bullish market. The rising of Bitcoin happen suddenly and it fails some people's prediction. Which I know that bitcoin will rise within the space of it determination

I definitely agree with your statement.

With the popularity of cryptocurrencies attracting more and more people investing, the supply and demand primarily dictates its price on the market. When BTC halving occurs, the denomination of it being distributed is lower allowing its price to further increase in the market. As far as I know, the next halving will happen this 2024, which somehow implies that its price may skyrocket once again.

Halving event doesnt ensure or guarantees that the market would be rising after than because if we do make out some comparison or on things that happened in the past specially on halving event it didnt really make out
some effect immediately but theres a time that after that even where prices tends to increase even further and the best is that it do able to reach new all time heights which is really great.
If we do speak about growing over time then this would really be just a simple economic subject type of question which would mainly involved supply and demand thing.
So as long there's a demand and support for BTC then expect that its potential could always be there and price does have high chances that would really be more in the future.

the continuity and longevity of this market really depends on people and the developments that will come about. if they see that this market is helping them, they will continue to support this market. as we can see, more and more individuals or stakeholders are still trying to get involve in this market because of the hope that this technology is still in the early stage and in the future, it will be more valuable, thus, potentially earning good profit if they will join this market.
but just like any other technology, we also need to prepare about its epilogue...

The growth is achieved through different levels of people's usage starting from the bottom. In the beginning people didn't had positive thoughts about cryptocurrencies, later they've well understood about it. The next level of growth is through the instructions investment and the different service providers acceptance of bitcoin into the business.

Recently leading Bank in Eurozone, BNP Paribas have announced it is going to have space for custodian service for Bitcoin and other digital assets. This kind of moves give confidence and trust over the market as people have fear on the market for the high risk out of the volatility.

In my opinion, the government is the biggest threat to bitcoin's growth, if all governments regulate or ban it, then bitcoin's growth and popularity will be hampered. The government is a significant influence on many people's thoughts, if they declare bitcoin as a valuable asset, people will definitely rush to buy bitcoin but if it is declared illegal, people will surely take precautions and don't use bitcoin even just to try.

Don't you think that's an irony. Bitcoin was created just so that people can own their money and become aware of the fact that how centralized the traditional fiat system is.
Governments are controlling it and bitcoin was created so that the government doesn't control it.
So in a way, bitcoin was to be adopted by the people without the approval of government at first place.
So even if the government declare bitcoin as a valuable asset or not, it's value will and should be derived by the people demand.

I think it's away to teach people restraints. You mess with it you get what you deserve. (Sooner or later you will be screwing around).

Buying some more sats in a moment. From Justin's wrap. So it ain't all talk. Soon to rich to be TX bragging ;-) Cheers.