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Why Is Bitcoin So Expensive

Bitcoin is most popularly known as a cryptocurrency. Simply, we can call it virtual currency, which acts as money or a mode of payment. Outside the control of any individual, group, or large circle, the removal of the interference of third parties in financial transactions is called peer to peer. This means that a person doesn’t need to depend on the government or any financial institution for transacting the money. Furthermore, all countries have their different bitcoin price. It happens because of fluctuations in the currency rates of different countries. However, the user can see their bitcoin rates through some applications available on the online database.

Bitcoin uses the method of public-key cryptography. This technique is used for securing the information in a mathematical concept that protects the information and conversations using a few codes. Also, there are two keys available: a public key that everyone can see and a private key, which is only known to individual systems. All data is managed and saved by the ledger file, and the identity of users is anonymous. As far as transactions are concerned, people can view the information who have access to their investments.

Reasons Why Bitcoin Is Expensive

As of now, we are aware of the basic fundamentals of the bitcoin cryptocurrency. Let’s get to know the reasons why it is expensive:- 

The supply of Bitcoin is limited

Bitcoin’s supply is limited to only $21M. According to many experts, the limited supply and deficiency are considerable contributors to bitcoin’s value. Since its beginning in 2009, the worth of Bitcoin has grown by a million creases in over ten years. The maximum number of issued and mined bitcoin has still remained the same. Interestingly, every 10 minutes, a new bitcoin is added to the bitcoin supply. After the number of bitcoins reaches the maximum limit of $21M, no new bitcoins are issued. Although, Bitcoin exchanges will be ongoing, with just exchange charges.

Institutional Adoption 

As examined, the worth of Bitcoin considerably increased in 2020, but not with retail financial backers. Various foundations, both public and private, have been collecting Bitcoin as opposed to holding cash in their depositories. Recently it’s a trend where public companies are converting their cash into cryptocurrency.

Bitcoin Is Volatile, And Its Value Fluctuates Rapidly

Bitcoin was made publicly in 2009, and it got popular around 2010. The price has increased by a hundred to a thousand dollars. Sometimes the price is up and at times the value goes down by thousands of dollars within a few days. It has no constant value. Therefore, if you are investing in bitcoin, then there is no set value. Because it can fluctuate either rapidly or slowly, investments should be carefully done.

The Demand For Bitcoin Is Increasing

Another reason for the appreciation of bitcoin’s value is due to its collaboration with different payment methods. Recently, Pay Pal announced that it would allow its users and vendors to buy and sell cryptocurrencies as a mode of payment. After getting this news, bitcoin’s price shot up remarkably. In the future, it’s estimated that the price can go higher if authoritative companies like Paypal will accept the cryptocurrency.


Now that you have a better understanding of the play between the limited supply and high demand, you can see how this affects Bitcoin’s value. By following the latest trends and keeping up with the news in the cryptocurrency world, you can make better-informed investment decisions. Next time you wish to invest in Bitcoin, remember to do your research so that you can avoid potential pitfalls.

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