Supply and Demand Dynamics
There will only ever be 21 million Bitcoin. There are roughly 56 million millionaires in the world. If every millionaire wanted just one Bitcoin, there would not be enough. This simple math — fixed supply meeting growing demand — is the fundamental driver of Bitcoin price appreciation over time.
Price moves when buyers and sellers meet. If more people want Bitcoin (demand) than people willing to sell it (supply), price rises. If the opposite, price falls.
Simple definitions:
- •Supply: How many coins are available to sell right now.
- •Demand: How many coins people want to buy at today’s prices.
- •Liquidity: How easy it is to buy/sell without moving the price a lot.
- •Order book: A list of buy and sell offers on an exchange.
Price is where supply meets demand. Bitcoin is unique because its supply is the one variable that can never change. Every other asset — gold, real estate, stocks, fiat currency — can have its supply increased. With Bitcoin, the only variable is demand.
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