What are the factors that affect the bitcoins value ? Just curious guys. Wanted to learn more.
I think bitcoin is money and like any money it actually is not worth much at all. You can't eat it or live in it, etc. But money can be valuable as a store of value if it has certain properties:
1. Can't be cost effectively counterfeited.
2. Is believed to have value.
3. Is exchangeable in fungible units.
If these factors change, that would greatly impact valuation. Beyond that bitcoin has additional properties of privacy, speed, and cost savings. One can see that as the mem pool backs up or larger fees are required, the utility is degraded a bit and so is interest. An open and free bitcoin network also depends on net-neutrality. A loss of that would be very destructive to the utility and value of bitcoin as it would allow any ISP, government, ect. to add whatever fees or restrictions they want. Fees that go beyond the cost of mining.
On a week to week basis the main factors are supply/demand. The current spike in price is mostly just an increase in demand in Asia. Of course when speculators see a demand increase they jump in and drive the price higher. This ends in a correction and we start all over again.
