It's basic supply & demand, which is the fundamentals of how anything is priced. High supply and low demand? Price goes down. Low supply and high demand? Price goes up.

For bitcoin the supply side of the equation is limited by design. There will only be 21 million bitcoin available, ever. Right now there are about 19.5 million in circulation. The bitcoin protocol was designed with a mining reward that is reduced by half every 210,000 blocks, which has been about every 4 years. This will continue until the final, 21 millionth bitcoin is mined, which is expected to be around the year 2140.

Another factor that could affect available supply is hoarding. Like how the Hunt brothers hoarded silver in the early 1980s to drive world prices up 713% in a short time period.

And the demand side? Right now the demand for bitcoin is largely driven by speculation. People aren't really buying it to use, they are betting on it, gambling that the price will soar and they will cash out as winners.

If/when bitcoin does become more useful as a currency for everyday transactions, the demand for it will rise, more people will want to use it. Then the price will likewise rise. People buying today are speculating this will happen later. Despite many attempts, it really hasn't happened widely yet.