Bitcoin is the first and most popular cryptocurrency in the world, which is a very publicly known fact. The price of Bitcoin changes mostly because of the following crucial factors (of course, there are others, but their impact is less important).
First, there are fluctuations in supply and demand just like with gold. Just like mining costs are primary influencing factors for gold, the Bitcoin price is determined by the need for solving some equations, which are also called mining. This refers to the supply part. The other part is the demand for Bitcoins, which is based on awareness around Bitcoin, its popularity, trust among crypto community members and more. If the demand is high and the supply does not meet the demand, this causes a spike in the Bitcoin rate.
Second, there are new technological advancements that can affect Bitcoin’s price, for example, integration with PayPal is one instance which has sparked a renewed interest in the currency among people, leading to a rise in its value.
Another factor is media coverage, the more positive review BTC gets, the more its price will go up. The opposite is expected with negative reviews. The crypto community around Bitcoin is very strong which gives it more value because of the trust that the community has placed on it.
An important factor that influences BTC price is also the regulations enforced by governments on Bitcoin transactions. Bitcoin prices fluctuate whenever there is an official statement regarding digital currency regulation, meaning that if some government bans BTC transactions prices will go down.
Bitcoin’s popularity should be mentioned again because most people trade Bitcoins for altcoins, it’s the easiest way to get altcoins. This leads to the co-dependence of their prices. Bitcoin is the most used cryptocurrency in the world and just like the US dollar has a heavy influence on other currencies in paper money, BTC has influence over other altcoins. Some would argue that this is not a one-way relationship but in most cases, the prices of altcoins follow the price of Bitcoin.