The price of Bitcoin remains very volatile. I have read predictions that it will go up before Christmas due to increased spending power. However, the opposite seems to be the case. Being a worldwide phenomenon, many drivers of Bitcoin exist. Which ones do you deem to be most relevant?
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The price of bitcoin is driven by demand.
The demand for bitcoins should in principle come from the perceived future value of the digital economy that cryptocurrencies more generally have created and/or will create, where bitcoin currently plays the role of the dominant medium of exchange.
However, since the market is flooded with casual investors and kids with lambo dreams, the price is actually more driven by the eminent probability of bullruns, which creates feedback loop effects in the price.
One the most relevant factor is thus the momentum gains on social media, which itself is usually driven by consistent (slow) gains in the price.
Exterior factors include policy decisions from regulators/governements, how well/bad the physical economy is doing, technological improvements of crypto currencies/assets, etc.
As Frédéric Ouimet explained, the demand is driven by many factors. While the demand of bitcoin is high (and starts to decrease as it loses some popularity), the supply is also low.
Its supply is mostly driven by how hard it is to find the next block-solution (per one bitcoin) and how many miners there are. Relevant is also the price of computation power (electricity and cooling, computer chips and graphic cards, as well as cloud computing services). So everytime new bitcoins are mined, there should be a new "optimal" price.
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