I just read one of the most important questions about Bitcoin, a question that I haven’t read many good answers for. Fortunately, I have cracked the cryptos as you already know since my nickname is Crypto Cracker and here is the real answer. You might regard this post as mansplaining if you are a misandrist but that is your problem, not mine. These are the facts.
Much of the value of bitcoin and many crypto coins comes from the properties of the blockchain technology. Visibility of each transaction; “relative” privacy; resistance to fraud; protection against double-spending of coins etc – all these characteristics are very good, and so are deemed to be valuable features of the blockchain and bitcoin network itself. We know that there can only be a maximum of 21 million bitcoins once they have all been mined. One bitcoin, therefore, is basically 1/21,000,000th share of the overall bitcoin network. The dollar value is actually irrelevant except that dollars is how we measure things as the moment. As more people become interested and involved with bitcoin and cryptos, they increase the dollar value because they are wlling to pay more for their share of the bitcoin blockchain/network/infrastructure – call it what you want. If the bitcoin blockchain did not have any good features that made it resistant to fraud or any of those good things I mentioned earlier – if those good features did not exist then nobody would care about owning it, i.e. there would be no demand for it, and the dollar value would be basically nothing. It is the great features built into the blockchain technology that creates the value – and the public demand that creates the price.