The chart on this page shows the real-time bitcoin price by default. The bitcoin price can change at any time, this is because trading in the digital currency is never static. Every trader’s dream and nightmare, shall we say.
At the moment 1 bitcoin is worth exactly:
Recently we have received a number of questions regarding the bitcoin exchange rate. On this page you will find the most frequently asked questions about the bitcoin price and how it came about.
Why are bitcoins valuable?
There are several reasons why bitcoins have value. The first is because bitcoins are seen as a form of money, just like our GBP or the US Dollar. Bitcoin shares many of the same characteristics that we see in money, such as: divisibility, scarcity, recognition, durability and portability. The most important reason why bitcoins have value is undoubtedly the trust placed in them by their users.
You may not realise it, but bitcoin is one of the first currencies people choose to use. You, as a citizen, never chose the pound and you certainly never chose to use it. The central authorities require you to use the pound, for example you cannot pay your taxes in a currency other than the pound.
A common argument is that bitcoins have no intrinsic value and the pound does. However, this is not true, it is only what you as a user consider an intrinsic value. We see the computing power of the bitcoin network (the so-called hashing power) as the underlying value of the digital coins. The pound has no intrinsic value; the central bank’s gold reserve, for example, has nothing at all to do with the number of pounds put into circulation. The pound is based on trust and when that trust falls away, little value remains.
How is the price of bitcoin determined?
The bitcoin price is simply determined by supply and demand on the various cryptocurrency exchanges. If the demand for bitcoins rises, the price will automatically rise with it (if demand exceeds supply at that time). As you can read on our bitcoin explanation page, there are only 21 million bitcoins in circulation.
The bitcoin market is relatively small compared to other markets, the result is that with a large investment the price of bitcoin quickly rises. This is one of the reasons why the price of bitcoin is very volatile. In comparison, at the time of writing the total bitcoin market is around 100 billion pounds, a commercial company like Apple is worth ten times that.
Can bitcoin lose its value?
Yes, bitcoin can lose its value. Although we are very enthusiastic about bitcoin and the underlying blockchain technology, it is important to keep both feet on the ground. The history books are full of coins that are no longer used. Think of the German mark or the Venezuelan bolivar, both lost their purchasing power due to hyperinflation. Although hyperinflation is not possible with bitcoin because the amount of bitcoins cannot be increased just like that, there are plenty of scenarios we can think of where bitcoin could lose its value.
Our tip is and remains the same: never invest more money than you are prepared to lose. However, no one can predict the future, not even for bitcoin.
Is bitcoin a bubble?
Some critics have likened bitcoin to a ‘bubble’, this opinion mainly stemming from the rapid price rise the digital currency has experienced in recent years. Although a sudden downward correction due to artificial overvaluation can be called a bubble, we see bitcoin as something else. The price of bitcoin is determined by thousands of factors, the price fluctuations could also be seen as a market still searching for a price (price discovery).
Malaya started his writing and editorial carreer at university when he came to London about five years ago. He has seen almost any available software tool or wallet for coins from the inside and is passionate to share his experiences.