The price of Bitcoin is determined by supply and demand. When demand for Bitcoin increases, the price of Bitcoin rises; when demand decreases, the price falls. There are only a few Bitcoins in circulation, and new Bitcoins are issued at a predictable and gradually decreasing rate, which means that demand must follow this inflation level to keep the price stable. Compared to the market size it may become, Bitcoin is still a relatively small market, and it does not take a lot of money to make the market price fluctuate up and down, so the price of Bitcoin remains very volatile.
Bitcoin price changes over time:
