And why the bitcoin value is entirely dependent on the black market. 

It is simple supply and demand.  Lets look at each side. 

Supply:

Supplied by miners.  Any serious operation NEEDS to sell to pay utilities.  That creates a steady supply of bitcoins offered at market price on a regular basis. 

Demand: 

Reasons to buy.

1.  Investment.  Nope.  Not in any real amounts.  Investors like security and the bitcoin is pretty much the opposite of secure.  They also like secure exchanges and the bitcoin exchanges are pretty shady compared to mainstream exchanges.  That is kind of an understatement really. 

2.  To use as a transactional currency.  This is the real appeal of the bitcoin.  But there is no reason for someone to convert dollars to bitcoins and buy something unless it is illegal.  It is inconvenient and provides zero protection against theft or fraud. 

That leaves us with a large, steady supply regardless of price, and limited demand based on black market products. 

I wish I could short bitcoins.