Just like in the case of any currency, bitcoins are having a supply and demand that dictates their prices. However, unlike many currencies nowadays, these bitcoins don’t have a stable price because the demand and supply tends to fluctuate. The supply isn’t at an exact rate since they aren’t mined at a constant rate, and because of that the demand is fluctuating as well. Still, more and more Bitcoins are necessary on the market, yet the fixed supply helps maintain an integrity, while also removing any worries as well.
The demand for bitcoins has seen a high fluctuation, in fact you get a volatility of around 5%, which is way more than any other currency on the market. The problem with the volatile demand is what actually changes the prices so much. Businesses based on bitcoins do have a problem to grow on their own, because relying on such a volatile market can lead to a lot of problems.
In order to make the supply elastic and keep the prices at bay, there has to be some sort of control over the Bitcoin market, but this is, unfortunately, very hard to achieve since the network has its own control over the currency.
There are a few ideas in regards to the metrics that should be used, and one of them suggests the addition of a flat currency, something that might help the market in this regard. On top of that, there is another approach that would require the use of an internal metric, which would be helpful!
The constant mining process also induces the problems as well, since no one can actually know how many Bitcoins are on the market, and in case too many are mined, then you can immediately crash the market. This is why the market needs to be very careful in regards to the way Bitcoins are used, otherwise we can deal with a lot of problems in this regard.
A solution might be available when it comes to changing the way the supply is handled in order to reach a more stable price. Still, this can be hard to achieve, and the fast way the bitcoin market creates new coins, it can be close to impossible for any government or market to have control, maybe this can happen when all the bitcoins have been mined.
In conclusion, while there are many methods of subduing the bitcoin price and making it stable, these are mostly things that the market tries in order to have some control over the matter. However, the bitcoin price will still fluctuate, and maybe this is for the better, considering that there will always be a great difference between supply and demand. Still, more attempts of making the price stable will appear, so we look forward to see how these will actually affect the market!