In principle, currencies are no different than goods and services: supply and demand determine the price. This applies to conventional currencies as well as to the digital currency Bitcoin. The question that arises from both users and critics is what the real value is. Because a Bitcoin basically only consists of zeros and ones. A value is only generated through the arrangement. These are already two factors that determine the value and price development of Bitcoins. Expectations are directly related to demand: idealists naturally set them higher than their critically inclined contemporaries. Anyone who speculates on an increase in the value of Bitcoins will buy them as much as possible in order to benefit from the price gain. This alone increases the price or the value of Bitcoins, albeit in a mostly barely measurable volume.
At the beginning of its existence, Bitcoin was able to soar. However, since permanent increases in value almost never occur in the free economy, there was also a severe setback for Bitcoin in the summer of this year in the form of a significantly falling price. However, this can be seen with a laughing and crying eye at the same time, because it makes investors more cautious and prevents new speculative bubbles from growing up. Ultimately, a loss of exchange rate can also contribute to the stability of the currency in question, if all participants learn their lessons from it.
The exchange rate is currently recovering from its months-long decline.The recession seems to be over and new confidence is being invested alongside the euro and dollar. The sharp drop in the price is due to several incidents, which can only be indirectly linked to Bitcoin: For example, the largest American Bitcoin
exchange was attacked by hackers, which is why trading had to be briefly interrupted. However, this and other incidents are not due to weaknesses of Bitcoin itself, but to its management. After all, all participants should also take care of their bitcoins as well as their cash. Counterfeit-proof money can also be stolen if its users do not adhere to basic security requirements.
