Personally, I think everything that has value is because people thinks that it has value. That’s just it, if people don’t think that something has value then it is not going to have any value at all. Bitcoin serves a purpose which is transaction, so that’s why people believes that it is useful for them and therefore it has a value: for it to serve that purpose of transaction it needs to have a value, a price.

At first the value of Bitcoin is said to be determined by supply and demand, and I believe that still plays a role in determining the value this time around, but as time goes on I think there have been some changes as well that applies to that. A search on Google can bring up a lot of articles that we have deep explanation for this I believe.