Bitcoin launched in 2009, and it saw massive spikes and several major crashes. If you’ve been investing in crypto for a while, you know that the only thing for sure is that it’s a rollercoaster. Its value dramatically rose multiple times and crashed as well, like in 2011, 2013, 2018, and 2020, but it managed to come back with a roar each occasion. Despite its volatility, recent adoptions, big-time investors, and massive hype all contributed to the increase in value, making BTC a major step toward a truly decentralized currency. But what influences these highs and lows? Eventually, how is the Bitcoin price determined? By several factors that impact supply and demand, including governments adding it to their reserves and institutional adoption through ETFs, which make it easier for people to buy Bitcoin with their bank accounts, driving mainstream adoption. Many investors also see Bitcoin as a store of value, like gold, recognizing its true worth as a decentralized asset beyond the control of banks or governments. Today, more and more countries are exploring crypto regulation, and big players are getting involved. Bitcoin isn’t just a fringe tech anymore: it’s a full-fledged digital asset that is massively influencing the future of finance. In this PlasBit piece, we’ll list all the factors and players that determine Bitcoin’s price plus give you a historical recap of its highs and lows.
Key Factors Influencing BTC’s Price: An Inside Look
Supply & demand is only the simple answer, so here’s a handful of other factors that play a role in BTC’s price:
- Scarcity. Did you know that BTC has a hard cap of 21 million BTC? Its creator, Satoshi Nakamoto, set this limit, essentially earning it the nickname “digital gold”. With over 19.8 million BTC already mined as of 2025 and demand still high, the limited supply only boosts its value.
- Macro factors. Inflation, financial crises, interest rates, market crashes, housing market changes… all these macro factors can push you to crypto as an alternative store of value. Although not even BTC is immune to global effects, its decentralized nature is an appealing investment in uncertain times.
- Regulation. Largely unknown in the early 2010s, BTC and crypto as a whole are booming, and lawmakers are trying to catch up. Many countries have specific regulations for crypto earnings: some make life easier for these currencies, while others make things difficult. These legislative moves also alter Bitcoin’s price as they also affect adoption rates and investor sentiment.
- Memecoins. Lacking real-world use but promising huge rewards, memecoins have a profound effect on the price of Bitcoin. With more and more meme and altcoins out there, investors see more opportunity in them, which also affects BTC’s price.
- Whale movements. When someone moves a lot of valuable assets at once, the market senses the ripple effect. In 2025, an unknown individual transferred 5,000 BTC from Bitfinex to an unknown wallet. Massive moves like this can mean that the whale is holding assets long-term, which in turn reduces the pressure on the market to sell.
Again, there is no silver bullet to understanding how is the Bitcoin price determined. It’s a mix of micro and macro factors, supply and demand, and the unique attributes of crypto itself.
Memecoins And Short-Term Gains: Chasing Shadows
Our experts at PlasBit agree that memecoins and altcoins have turned a large chunk of the crypto market into a high-stakes casino, which also means that they influence the price of Bitcoin to some extent. The world of memecoins is where memes, trends, and hype are more important than utilities or long-term visions. Bitcoin was designed as a decentralized alternative currency, but memecoins are poor imitations of the original concept as they offer little to no real-world use. And yet they thrive, even though their existence barely impacts how is the Bitcoin price determined. They’re extremely unpredictable, which attracts fortune hunters and gamblers rather than “real” investors. This volatility promises the illusion of getting rich fast - and even though high reward comes with a much higher risk, they are still extremely popular in the crypto world.
$TRUMP is an excellent example of how memecoins deflate after a brief hype period
Social media influencers and communities are responsible for building up the hype around these memecoins, often resulting in short-lived frenzies or worse - rug pulls that leave investors in the cold. Despite these high-risk/high-reward scenarios, people flock to memecoins, which means capital flows toward these projects as well. This, sadly, undermines the philosophy of Bitcoin and pushes the crypto market into more speculative territories. Philosophically, cypherpunks would agree that memecoins undermine BTC’s image and crypto as a whole, but how does it affect its value? Oddly, the impact can be both good and bad. When memecoins pump, they can bring new investors to the space. This results in a spillover, lifting the entire market, and raising BTC’s value as well. Some investors also transfer their memecoin profits into BTC as they regard it as a safer currency. On the other hand, memecoins often give a bad rep for more serious crypto currencies like Bitcoin. Rug pull schemes are frequent, and memecoin investors often lose their investments, further damaging crypto’s reputation. Capital drain also affects BTC’s value negatively: when investors pump memecoins, it drains some capital out from BTC.
About Bitcoin’s Core Values
Although Satoshi Nakamoto never wrote an actual manifesto, the Bitcoin whitepaper aka. “Bitcoin: A Peer-to-Peer Electronic Cash System” is considered a foundational document by most. Its roots lie in the cypherpunk movement of the late 80s and 90s, which was an informal group (i.e., an actual mailing list) of activists, technologists, cryptographers, and just radical thinkers in general. They believed that decentralized tech and bulletproof encryption are key to social and political change. Cypherpunks envisioned a world where you could make transactions freely, without any surveillance or censorship, and far from the control of the state or financial institutions. This deeply libertarian philosophy was nurtured by milestone events attempting to create an anonymous transaction system. In 1997, Dr. Adam Back created the Hashcash system, which used computing power to show that an email is sent by a real person, thus protecting against spam; in 1998, Wei Dai published B-Money, which offered methods for storing transaction data; and 7 years after, Nick Szabo introduced the Bitgold project. Finally, in 2008, Satoshi Nakamoto sent his article to the cypherpunk mailing list and, shortly after, mined the genesis block of Bitcoin, marking a new era of cryptocurrencies. BTC’s history is full with twists and turns, but its foundation whitepaper and values are still true today:
- Decentralization. No central authority should control the currency. Its power is spread across a global network, dodging the influence of the financial and political systems.
- Trustless system. Cryptography and proof-of-work mean that we don’t need “trust” between intermediaries.
- Hard cap. There are only 21 million Bitcoins in total, out of which 19.5 million already have an owner. This should prevent inflation by design.
- Immune to censorship. No individual or government is able to block or reverse valid transactions.
- Security. A public ledger (or blockchain) makes sure all transactions are transparent and secure at the same time.
- Peer-to-peer. BTC should allow anyone to make transactions directly on a global scale.
The key tenets of Bitcoin remain the same in 2025. Unlike memecoins and other volatile currencies that transform crypto into casinos, BTC’s true to its original ideas, making it the most expensive and reliable cryptocurrency to date.
Who Decides The Value Of Bitcoin?
Since fiat currencies are tied to governments or other institutions, it’s fair to ask: who decides the value of Bitcoin? It is driven by market supply and demand. When demand surpasses supply, the price increases, and when demand declines while more Bitcoin is sold by investors, the price falls. Government and institutional involvement, as well as market trends favoring altcoins that draw investors toward more volatile cryptocurrencies, also influence its price. The very reason we love crypto at PlasBit is its decentralized nature. No single figure decides its value. Of course, there are special cases when high-profile individuals do have some influence on the value of Bitcoin. Here are a few instances in which a single brushstroke affected BTC’s value: Elon Musk has a long history of influencing crypto prices with his infamous X (formerly known as Twitter) posts. In January 2021, he added #bitcoin to his bio, resulting in a 20% increase in its price. Unsurprisingly, when the Tesla and SpaceX CEO announced only four months later that Tesla wouldn’t be accepting BTC as payment because of environmental concerns, the crypto’s value dropped by 12% the next day.
If you’re the richest person on the planet, changing your bio line influences markets
Michael Saylor, co-founder at MicroStrategy, started investing billions of USD into BTC in 2020. In 2024, MicroStrategy acquired 446,400 BTC, which is now worth around $37 billion. Saylor did not only make almost $10 billion but also managed to drive MicroStrategy’s share price up by 400%. Needless to say, their aggressive trades in the crypto world kept pumping BTC’s value while also attracting more and more valuable investors to the market.
Donald Trump, the 47th President of the USA, announced drastic global tariffs in March 2025. With the baseline tariff at 10% and many countries hit by higher numbers, Trump’s measures bring about an age of economic uncertainty. And even though we think of crypto as a hedge against financial market changes, the global tariffs by the USA resulted in a massive drop in BTC’s value. Some analysts claim that shaky financial markets are actually great for crypto as they are independent of centralized monetary policies and prove to be a store of value. As of today, it seems that despite Trump’s earth-shaking tariffs, BTC is relatively unscathed and its value didn’t show the usual volatility.
Nayib Bukele, president of El Salvador, is known to most because of his harsh crackdown on violent crime in his country. But fewer know that in 2021 he announced his country would be the first to adopt BTC as an official currency. Many hail Bukele as a pioneer of crypto - others criticize him for spending taxpayer dollars on crypto assets in a country where 9 out of 10 of the population doesn’t know what BTC is and internet penetration barely escapes 60%.
It’s safe to say that unless you’re a key figure in the crypto world or an elected world leader (or perhaps a billionaire), chances are pretty slim you’d have any influence on it with your moves.
How Is Bitcoin Price Calculated?
Understanding the high peaks and sharp drops in BTC’s price at a glance is challenging. So, how is Bitcoin price calculated? By supply and demand: when demand exceeds supply, the price rises, and when demand decreases while more Bitcoin are sold by investors, the price drops. Political events, such as the Trump tariff wars with China, Mexico, and Canada, can also impact the price by pushing the global economy toward a recession. Demand is growing as governments add Bitcoin to their reserves and through mainstream adoption, making it easier for people to buy Bitcoin without fully understanding its mechanisms. Additionally, many investors view Bitcoin as a store of value.
Bitcoin's price has always been a story of the highest highs and lowest lows
Unlike memecoins, BTC’s real-world utilities provide a level of usefulness that makes the currency king in the crypto world even today.
- Store of value. BTC is often regarded as a form of digital gold. Its hard cap at 21 million BTC and decentralized nature make it a hedge against inflation and fiat currency devaluation.
- Payments across borders. Forget banking delays and middlemen, and enjoy low-cost transaction fees. This makes BTC extremely useful, especially in countries where the banking infrastructure is poor.
- No censorship. Do you live in an authoritarian country, or is making bank transfers controlled by the state? BTC allows you to bypass censorship and surveillance, making your funds immune to government control.
- Take it anywhere. If you’re in a situation where you need to leave your home country or just move funds quickly without any hiccups, BTC lets you carry your fortune across countries without it being confiscated.
- Legal tender. El Salvador and the Central African Republic have already made BTC legal tender, essentially allowing citizens to pay with BTC at any business apart from their local national currency. The effects are chaotic as digital literacy, internet penetration, and government communication are all lacking, but these moves show how serious Bitcoin became in the past decade.
- Micropayments. The Lightning Network scales blockchain capabilities and handles microtransactions faster and cheaply. Say hello to almost instant, low-fee BTC transactions.
Bitcoin’s Value Over The Years
BTC’s history is a rollercoaster and a hectic outline of how is the bitcoin price determined. Starting from literally 0 when it comes to value, as of writing this article, 1 BTC is worth over 84,000 USD. Glorious spikes and tragic drops mark the road to greatness - this is a brief summary of crypto’s most coveted currency.
- The early days (2009-2010). Launched by Satoshi Nakamoto, BTC didn’t have a market. Only a handful of people mined it as an experiment, if anything.
- First spike, first crash (2011). Mt. Gox, the first major crypto exchange, created hype around BTC, pushing the price up to $31. Then, a massive hack and a lack of liquidity rendered most of its gains zero (well, technically to $2).
- Global hype, spike, crash (2013-2015). Following the Cyprus banking crisis and a growing Chinese interest, BTC reached as high as $1,100. However, following Mt. Gox’s collapse and fears of looming regulations, its price fell back to $200.
- 20X in value (2017). In less than 10 years, BTC was a formidable force, but in 2017, it went ballistic. Thanks to massive retail adoption, an explosion of ICOs, and the media frenzy, BTC rose from $997 to $19,343 in the same year.
- A dire twist (2018). A bad year for BTC and crypto as a whole: regulators started to crack down in South Korea and China, while major players like fintech company Stripe or billionaire Warren Buffett, who could enable BTC’s growth, spoke out against it. Bitcoin’s value dipped all the way down to $3,300.
- Striking gold (2020-2021). COVID-19 hit economies hard globally, driving interest in decentralized assets. Major companies like Tesla or MicroStrategy started buying BTC, while PayPal enabled Bitcoin transactions. These favourable conditions sent BTC on a bull run that pumped its value to $67,000.
For 2 short months in 2021, you could buy a Tesla for BTC
- Bear market (2022). The Terra Luna collapse, the Celsius crash, and FTX’s $8 billion hole all triggered massive liquidations. Trust in crypto was shaky, and its value dipped once again, reaching as low as $15,790.
- Rebound (2023-2024). Regulations became more favorable, and big names started returning, resulting in a slow but steady improvement. BTC once again climbed to $60,000 and passed its previous record value by reaching the $100,000 limit.
While Bitcoin’s historical value is quite volatile especially when compared to traditionally strong fiat currencies, it still is the poster child of cryptocurrencies. Every dip is followed by a roaring comeback, and in just 16 years, its value grew from zero to over $80,000.
What Determines Bitcoin's Price?
Put away your crystal balls and tin foil hats, it’s time to settle it once and for all: what determines Bitcoin's price? Supply and demand: When there is more demand for Bitcoin, the price goes up. Demand is growing as governments add it to their reserves and through mainstream adoption, allowing people to purchase Bitcoin without needing to understand all of its mechanisms. On top of the fact, many investors also see Bitcoin as a store of value.
Bitcoin’s Price: The Takeaway
Understanding how is the Bitcoin price determined is no small task. Generally, it’s affected by supply and demand, market sentiment, and external factors, resulting in a highly dynamic and constantly shifting asset. Although predicting its value is a tough task even for seasoned investors, Bitcoin is a worthy long-term investment thanks to its decentralized nature, scarcity, and growing global popularity.
