PRICE IS JUST DEMAND, SUPPLY AND WORTH

in #business5 years ago

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The value of anything in this world is dependent on three things: what we believe it's worth which is affected by the demand and supply. For example if we believe a loaf of bread is worth a dollar and the demand and supply of the bread is the same then a loaf of bread stays at a dollar. but if the demand starts to get much more than the supply price starts to increase. If demand starts to fall below the supply then price starts to reduce. In today's world crypto currency is getting popular by the day and it is safe to say the demand gets higher everyday particularly in the dark web. But the face of this digital currency is Bitcoin which is king over all and next year it would be more difficult to mine because it would take twice the amount of work to mine it. If I am true to myself Bitcoin should not be up to what it's worth. But because of the high demand it is very expensive because more people are looking to buy over its limited supply which makes the holders of bitcoin hold unto the coin till a specified amount is reached and they hold unto it comfortably because they know many people are ready to buy for the asking price. But if people start to loose interest in it because maybe because of policies like the u.s banning Bitcoin then the demand will fall sharply and the holders of Bitcoin would sell it cheap because they are now looking for buyers. So every commodity is dependent on what we believe it should be worth which is affected by demand, supply and sometimes govt polices an example is that if cocaine was legal it would be extremely cheap because the policy has changed from illegal to legal which means no more risk in selling it and even more abundance in supply

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