The bitcoin price explained
The bitcoin price attracts a lot of attention. But what actually determines the value of one bitcoin? Unlike traditional currencies, stocks, or commodities, bitcoin isn’t backed by a central bank or tied to underlying earnings. Yet its price is determined in real time, changing every second and followed by millions around the world. On this page, we explain how the bitcoin price is formed, what factors influence it, and why it can be so volatile.
What is the bitcoin price?
The bitcoin price is the current market value for which one bitcoin was last traded. This price is determined by supply and demand on global exchanges. When more people want to buy bitcoin than sell bitcoin, the price goes up. If there is more selling than buying, the price goes down.
The price you see on websites or in apps is usually a weighted average of prices from various trading platforms. In the Bitonic app, we show you the best price we can offer at that moment for your purchase. Each exchange may display a slightly different price, depending on trading volume and liquidity.
How is the bitcoin price determined?
The price is formed through continuous trading between buyers and sellers. Each participant sets their own buy or sell price. This is called a free market. The market price is simply the result of the most recent transaction on an exchange.
For example:
- The current price of bitcoin is €100,100
- Someone places a buy order of €100,000 for one bitcoin
- Another person accepts the offer and sells their bitcoin
- The new market price is then updated to €100,000
Because bitcoin trades 24/7, the price changes every second.
Why is the bitcoin price so volatile?
Bitcoin is known for its price fluctuations. This volatility is driven by several factors:
- Limited supply: there will never be more than 21 million bitcoins. After each halving, the issuance rate decreases.
- Emotion and sentiment: news, social media posts, and macroeconomic policy strongly influence investor behavior.
- Liquidity: Although Bitcoin is now one of the largest assets in the world, with a market capitalization exceeding that of many publicly traded companies, the market is still relatively sensitive to large transactions. Compared to traditional financial markets, such as the stock or bond market, trading liquidity is more limited. As a result, large buy or sell orders can still cause significant price movements.
- Speculation: many traders buy or sell based on expectations or rumors, increasing volatility.
These elements cause the price to rise or fall quickly.
What influences the bitcoin price?
While the price is mainly driven by supply and demand, several factors play a role:
1. Market sentiment
Positive news (such as adoption by companies or governments) can increase demand. Negative news, like stricter regulations or exchange hacks, may create selling pressure.
2. Macroeconomic developments
Inflation, interest rates, banking crises, or capital controls can increase interest in bitcoin as an alternative asset.
3. Technological developments
Improvements in the bitcoin protocol or infrastructure (such as the Lightning Network) can boost confidence.
4. Movements of large players
When institutional investors or public companies like Strategy buy or sell large amounts of bitcoin, this can significantly impact the price.
Difference between buy and sell price (spread)
On exchanges or broker platforms like Bitonic, you may notice a small difference between the buy and sell price. This is called the spread and covers risks, transaction fees, and operational costs. Bitonic always shows clearly what price you pay or receive — no hidden fees.
How does Bitonic handle pricing?
Bitonic bases its price on a combination of global market prices and internal trading activity. This ensures a fair, transparent price that closely reflects the broader market.
The price is updated in real time and available 24/7. You can buy or sell bitcoin at any moment — without surprises.
How to deal with price volatility
Bitcoin’s price volatility can be intimidating, especially for new investors. At the same time, those fluctuations can present opportunities. One common strategy to manage price swings is Dollar Cost Averaging (DCA): investing a fixed amount of money at regular intervals – for example, weekly or monthly – regardless of the current price.
This approach helps reduce the risk of investing a large sum at an inopportune moment. However, it’s not a guarantee of profit. For example, those who began DCA’ing near a market peak may remain underwater for a prolonged period. It’s important to carefully consider your own risk tolerance, maintain realistic expectations, and only invest money you can afford to lose.
Bitonic offers Bitonic Auto Invest, an automatic bitcoin DCA service that allows you to build a position gradually over time.
Bitcoin price prediction
The question of what the bitcoin price will do in the future is frequently asked. However, it's important to understand that no one can predict the price with complete certainty. As previously discussed, the bitcoin price is shaped by a combination of factors such as market sentiment, macroeconomic conditions, regulatory developments, and the level of adoption.
Other elements also play a role. In the short term, the level of leverage in the market can have a significant impact. High funding rates or sharp movements in derivatives markets can lead to increased volatility – both upward and downward.
Many investors also refer to the so-called halving cycles: periods of price increases that followed the halving of the bitcoin issuance rate. While previous cycles have shown this pattern, the future remains uncertain. Bitcoin is still relatively young, which means there’s limited historical data for comparison. Moreover, past performance is no guarantee of future results.
Some analysts are optimistic about bitcoin’s long-term prospects. At the same time, it's important to be prepared for corrections or extended sideways movements. A realistic view of the bitcoin price involves acknowledging both opportunities and risks.
That’s why Bitonic does not make price predictions – but we do offer tools to help you invest in bitcoin responsibly and with a long-term strategy.
Frequently asked questions about the bitcoin price
Bitcoin is traded on many different platforms worldwide, each with its own user base, liquidity, trading volume, and local currency pairs. Because there is no single global price, supply and demand dynamics on each exchange can vary slightly. This leads to minor price differences between platforms. Larger platforms with more liquidity often have tighter spreads and more stable prices.
What is the all-time high for bitcoin?
You can always check the current price and historical peak on our live bitcoin price page.
Can the price go to zero?
In theory, any asset can lose all of its value, including bitcoin. However, this scenario is extremely unlikely as long as there is demand for bitcoin as a scarce digital asset, a store of value, or an alternative to traditional currencies. Its decentralized nature, strong network effects, and growing global adoption provide a foundation that supports its long-term value.
Conclusion
The price of bitcoin is determined entirely by supply and demand in an open, global market. Its fixed supply, transparent design, and decentralized structure give it a unique pricing mechanism that differs from traditional assets. While its price is known for being volatile, that volatility also reflects a dynamic and maturing market.
With the right approach, knowledge, and tools, navigating bitcoin’s price movements becomes more manageable. Bitonic offers a reliable platform with competitive rates and useful features to help you invest in bitcoin thoughtfully and responsibly over the long term.
Trading bitcoin involves risks. You may lose (some of) your investment.
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