The price of a Bitcoin is determined by supply and demand. When demand for Bitcoins increases, the price is rising and when demand falls, the price drops. There is only a limited number of Bitcoins in circulation and new Bitcoins are created at a
declining and predictable rate, which means that demand must follow the level of inflation to keep the price stable. At this point, it is worth noting that Bitcoin is a very rare currency, as there are currently only 16.5 millions of Bitcoins in circulation, while only a total of 21 million will be created.