Demand can increase as a project gains awareness or as utility increases. Broader adoption of a cryptocurrency as an investment also increases demand while effectively limiting the circulating supply. For example, when institutional investors started buying and holding Bitcoin in early 2021, the price of Bitcoin increased significantly as demand outstripped the pace at which new coins were created, effectively decreasing the total available supply of Bitcoin. Continue reading your article witha WSJ subscription Orphaned Well Bitcoin Mining Partnership Program&; Despite their obvious differences, Bitcoin turns out to be similar to a fiat currency insofar as it is backed largely by how much is $1 of bitcoin worth consumer confidence. As belief in the crypto space grows, so too will confidence in Bitcoin.