What determines the price of Bitcoin?
By Moris Beracha Bitcoin has lost over 50% of its value in less than six months. Shortly before Christmas, each token was trading at over $ 19,000. Today it is worth a little over $ 8,400. Bitcoin investors predict a meteoric rise that will recommence any day now. However, Bitcoin has refused to cooperate, by staying stubbornly stuck below 10,000 for the last two months. According to Forbes, the "labor theory of value" essentially says that the price of a good or service is determined by the work required to produce it. But, other schools of economics say that the value of a good or service is whatever someone will pay for it. Moreover, if the producer values the effort more highly than what the market will pay, they will stop producing it. So if prices fall, therefore, marginal producers tend to drop out. But as time goes by, more and more producers drop out until prices rise enough for the market to clear. Something similar h...