Bitcoin has always been the leader of all cryptos in the market. In recent times, the crypto celebrated its 11-year anniversary, as it has recorded successes since it was developed. Within the previous ten years, Bitcoin attained many milestones when it comes to price, adoption, and technical progress.

Bitcoin attracted people’s attention in the cryptocurrency domain when it put up a bull run in 2017. Since the bull run, there have been speculations on why its price surges and declines. During a podcast with Darius Dale, Anthony Pompliano discussed the reason for the changes in Bitcoin price.

According to Pompliano, there were several comparatively basic simplistic things. He continued that the two crucial things are: one, the price reacts to supply and demand; two, the price is dependent on what “you price the asset in.”

“So the whole idea of amazon stock is it’s not priced in one amazon stock for one amazon stock, we priced in dollar, so the dollar value is moving. Same way with Bitcoin. The dollar is priced in dollars, so, you end up with one dollar equals one dollar, inflation is kind of the hit […] so that purchasing power is changing, but one dollar is one dollar.”

He added that two financial systems exist: the inflationary fraction reserve system based on USD, and the “deflationary kind of automated software-driven.” The second is Bitcoin. Pompliano maintained that:

“And so, I think what ends up happening here is you get one hyper hyper-driven retail markets […] there’s not a lot of the structures that are in places in wall street in terms of smoothing price […] You have a relatively small amount of people holding asset, it’s very human-driven, and all of a sudden it gets exciting, price shoots up […]

Apart from the comparatively small market, he added that price discovery contributes to it. The price discovery of BTC is “kind of natural,” as it is a newer asset in comparison with gold, he said. Bitcoin is volatile because it is new, as people are stillattempting to know its value.

Featured image courtesy of Coindesk.