Many people wonder how the Bitcoin price is calculated, but it's important to remember that it does not work like other currencies or objects. Let's first see how the prices of most things are derived: we can use oranges as an example. How much does an orange cost?
Well, it depends. As a starting point, we would get the price of an orange based on two things: how much is someone trying to sell and how much else is trying to buy. If John wants to sell it for USD2.50 and Sarah only wants to pay USD2.00, there is no deal. But if they agree on a price that applies to both, say $ 2.25, then the transaction will happen. When it's winter, there may be more people who want to buy oranges, so the price will rise. Or if there is a drought, the supply of oranges is reduced, so more people try to buy fewer oranges, which can also increase the price.
Bitcoin and other currencies are a bit different from oranges in that they are called "homogeneous": one dollar is the same as another dollar, just as one bitcoin is like another. Oranges, on the other hand, can vary in size and quality. All this means that it is easier to get a price for a currency or bitcoin. Again, what a buyer and a seller will accept.
Many people do not know that other currencies work the same way: if you have a currency or a local currency, there are millions of people who buy and sell your local currency as long as you can observe as stable, its value is constantly changing. If you want to convert it to a currency counter for another currency, say for a dollar, one day you pay 10 local currencies for every dollar, the next day maybe 11 or 9. Bitcoin works in exactly the same way; You can imagine a different currency than you are used to.
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