A few essential factors determine Bitcoin’s price and value.

·​ ​Supply and demand

Bitcoin’s price is determined by the supply and demand of the cryptocurrency. If the demand for BTC rises faster than its supply, it pushes the price higher. With only 21 million bitcoins (BTCs) to be created and new bitcoins are created at a decreasing rate, the demand will align with the inflation level to stabilize the price. Bitcoin’s value will continue to increase as more people accept the cryptocurrency as a payment method.

·​ ​Usage

Bitcoin gaining more adoption helps push the price and value higher. In the past, retail users were the significant drivers of Bitcoin. However, Bitcoin is becoming mainstream, and financial institutions are pushing billions of dollars into the market. This means it is gaining more adoption and usage; hence, why its price went up by nearly 400% in 2020.