Bitcoin is subject to the market forces of demand and supply. As long as there are people that find it useful and that are willing to pay for it, it will have a value. So it is important to look at what factors determine Bitcoins demand and supply when determining its value.



In terms of its supply, there will only ever be 21 million Bitcoins. Unlike other currencies where the supply of coins is determined by policy and usually inflated, or unlike other forms of currency like gold and silver that the total supply is unknown, the total supply of Bitcoin is known. Bitcoin’s actual circulating supply may even decrease over time as people lose access to their Bitcoin by losing access to their private keys. Private keys can be forgotten or lost. If people forget to pass on access of their Bitcoins in their inheritance, the secrets will be lost with them. Another supply-side factor is if a payment network comes about that offers the exact same value and security that the Bitcoin network offers, then it could be argued that any coins in that network would share the same value space as Bitcoin and erode its value proportionally - but this so far is only hypothetical and a lot of other factors would be at play.



On the demand side, as long as people have the need to use a currency with the characteristics that only Bitcoin offers, and as long as those people are willing to trade their other forms of money to gain more Bitcoin, then Bitcoin will accordingly have value. In theory, the more people become aware of its properties and find that they have a need for those properties, then the value of Bitcoin is likely to go up as it has a limited supply.