The price of any asset is always impacted by a combination of factors. Unlike traditional financial assets, bitcoin has historically had its own set of factors affecting its price. Do things look any different now? Let’s find out.

Basic Factors: Supply And Demand

Bitcoin’s price is heavily dependent on supply and demand fluctuations, just like other assets. However, contrary to measures of fiat money, bitcoin’s supply is always known and its hard cap is set at 21 million coins.

The demand for bitcoin always sits at the top of the cryptocurrency world’s agenda — that’s why adoption of BTC is so talked about. Higher demand will lead to an increase in its price, especially when institutional investors get involved.

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