Who sets the Bitcoin Price
Bitcoin is like a commodity. Its price is determined by the market in which it trades that is the price of bitcoin is determined by how much someone is willing to pay for that bitcoin. The market sets the price of bitcoin same as Gold, Oil, Sugar, Grains, etc. is determined. Bitcoin like any other market is subject to the rules of supply and demand. i.e.,
Bitcoin's price is not set by anyone in particular. It is never traded in one place. Each market/exchange determines its own price based on supply and demand. Traders can trade Bitcoin on the Luno Exchange.
If you want to buy and selling bitcoin, you must have to choose a particular exchange. For example, the Luno exchange sets a specific price at a specific time for a specific market. Luno doesn't set the price; instead, the traders who are buying and selling on Luno exchange sets the price. The price of bitcoin is fluctuated at the moment, depending on who you talk to and it is often different from country to country.
NOTE: If a bitcoin owner sets the prices of their coin too high, no one will buy it. The owner will either have to reduce their price to a reasonable rate or just go without a sale. If the owner set the price too low, the coin will sell immediately and be taken off the market.
Why does the price of bitcoin change so often?
It is because the price of a bitcoin is very volatile. Since the number of bitcoins is limited in circulation, new bitcoins are created at a decreasing rate. It means that demand must follow this level of inflation to keep the price stable. The bitcoin market is still relatively small as compared to other industries; therefore it does not take significant amounts of money to move the market price up or down. Thus, the price of a bitcoin is still very volatile.
It is not only the Bitcoin exchange rate seems to change from day to day. Even the price of many things, such as stocks, currencies, gold and many other products can be volatile, i.e., moving up and down a lot against a base currency (such as the US dollar).