Who decides the price of bitcoin?

1

Okay so I understand that bitcoin's price is increasing/decreasing by its utility, its rarity on the market, how it is publicly perceived, innovations, media, investors exc..

My question is, who decides the price of bitcoin? Or any other cryptocurrency? The cryptocurrencies have value because we believe they have values. But who are the we here? Who changes its values hourly sitting in front of a computer?

I am asking, who is the guy or the group of people who changes the number that's on this link ?

Also this comes with further questions. The people who decide value of the currency can also try to manipulate it(increase/decrease) by their own interests right? For example if they have tons of bitcoins sitting in their wallet, they will try to increase its value so that they benefit economically. I mean, who would not do that?

turmuka

Posted 2017-10-13T14:29:18.323

Reputation: 161

I see this as being a wider question of supply and demand in economics for any currency or commodity, rather than just being about Bitcoin... – Highly Irregular – 2017-10-14T08:52:34.510

Answers

2

Prices are set by the market, meaning that every individual decides what they will buy/sell their own bitcoin for, and the generally accepted price is an aggregate of all the individual prices.

If a bitcoin owner prices their coin it too high, no one will buy it. They will either have to reduce their price to a more reasonable level, or just go without a sale.

If they price it too low, the coin will sell immediately, and be taken off the market. The buyer will likely price the coin higher, closer to the market value.

The sites that are buying/selling (such as CoinBase) are quoting the price they are actually willing to pay. Other sites that provide information (Blockchain.info) are posting the results of their survey of multiple buyers/sellers. It is possible that their data may be skewed or differ from the data on another site. But a liquid market with lots of activity should keep those differences small.

abelenky

Posted 2017-10-13T14:29:18.323

Reputation: 1 297

thanks a lot, so it's all about how much a market wants to pay for it. – turmuka – 2017-10-13T15:10:37.500

It's about finding a price at which someone is willing to buy it and someone else is willing to sell it. At a higher price, there are no willing buyers. At a lower price, there are no willing sellers. – David Schwartz – 2017-10-13T22:55:16.190