Bitcoin’s price has been on a rollercoaster ride in the past few months. After reaching a high of $19,000 in December 2017, the price crashed to below $6,000 in February 2018. It has since recovered to around $11,000.
So what’s behind this volatility? There are several factors at play.
Firstly, there is speculation by investors. Bitcoin is a new and relatively unknown asset, so some investors are betting that its price will go up (or down) in the future. This can cause sharp fluctuations in price. If you are planning for bitcoin trading then you need a bitcoin trading platform. One of the best and right bitcoin trading platforms for anyone is the quantum ai.
Secondly, bitcoin is used for transactions by some people, and when these people want to sell their bitcoin, it can put downward pressure on the price.
Thirdly, bitcoin is often used as a way to store value, and when people think the price is going to go up, they will buy more bitcoin. This can also put upward pressure on the price.
Finally, the amount of bitcoins in circulation is limited, so when demand for bitcoin goes up, the price goes up too.
Bitcoin’s VolatilityBitcoin’s volatility is a major issue that has been hampering its growth and wider acceptance. The value of the cryptocurrency has seen wild fluctuations in recent months, with its price reaching an all-time high of $19,000 in December 2017 before crashing to below $6,000 in February 2018.
This volatility makes it difficult for businesses and consumers to use bitcoin as a means of payment, as they are unsure about how much its value will change from one day to the next. It also makes it difficult for investors to gauge whether or not it is a wise investment.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Some experts have argued that Bitcoin’s volatility is actually a good thing, as it allows for greater price discovery and creates opportunities for arbitrage. Others have argued that the volatility is a sign of a bubble that is about to burst.
Benefits and Drawbacks of Bitcoin’s VolatilityBitcoin’s volatility is both a blessing and a curse. On one hand, it provides opportunities for traders to make a fortune. On the other hand, it can also lead to huge losses.
Bitcoin’s volatility is largely due to its limited supply. The maximum number of bitcoins that can ever be created is 21 million. As demand increases, the price of each bitcoin will increase as well. This makes it a lucrative investment for traders, but also means that its value can fluctuate wildly.
Bitcoin’s volatility has also been attributed to its lack of regulation. Because there is no government or central bank controlling Bitcoin, its price can be more easily manipulated by speculators.
Despite these drawbacks, Bitcoin’s volatility remains its biggest draw. For traders, it represents an opportunity to make a lot of money in a short period of time. And for investors, it’s a chance to gain exposure to a new asset class that has the potential to appreciate significantly in value.
How can we store value with bitcoin?One of the key features of Bitcoin is its ability to store value. This means that people can use it as a digital asset to save money and make transactions.
Bitcoin’s unique structure allows users to hold and trade it in a similar way to traditional assets such as gold or stocks. People can buy bitcoins, store them in a digital wallet, and sell them when the price rises.
This makes Bitcoin an attractive investment for people who want to protect their money from inflation. The value of Bitcoin has also been increasing in recent years, which makes it a good investment opportunity.
How does Bitcoin work?To understand how Bitcoin works, we need to take a look at its underlying technology – blockchain. Blockchain is a distributed ledger that records every bitcoin transaction.
This means that all users of the Bitcoin network can see the history of every bitcoin transaction. This makes it difficult for people to spend bitcoins they don’t own, as anyone can see the blockchain and trace the coins back to their original owner.
Bitcoin miners are responsible for verifying and recording transactions on the blockchain. They are rewarded with bitcoins for their work, which encourages them to continue operating the Bitcoin network.
Can I use Bitcoin to make payments?Yes, you can use Bitcoin to make payments at a growing number of online and offline stores. You can also use it to pay your bills or send money to friends and family members.
