Bitcoin Forum

Why is crypto so volatile?? Is value completely determined by the free market?

This is a complicated issue, theoretically like this. But some whales or big institutions can have a huge impact on cryptocurrencies.

Value should be the determinate of free market but manipulation of free market is worrisome as the Rich ( Big money bag) will manipulate the market to favor them. This is what is happening in crypto now.

For the most part, the answer is yes.
There’s a known and limited supply, so when demand goes up, so does the price. Technical innovation also contributes to bitcoin’s value.

Being volatile is the nature of crypto, since the price can unpredictably increase nor decrease because of its young market. And the fact that cryptos haven't backed by anything so it can freely manipulate.


Just simply the supply and demand.

Definitely, there is no other regulative program here, there is no governments, no sec, no nothing that decides on the prices, its free market, it could be whales that decides it and the smaller fish like us following their prices however that is what free market brings, if you have bigger capital you can ruin other small competitors.

Just like standard oil which started places in close to other oil companies and offered smaller prices until the other company went bankrupt and bought them and made the price even bigger, that is what free market brings, monopolies, so if you see the price controlled by just one person, don't be shocked but that is the risk we have to pay if we want freedom from government controlled money.

The price is determined by the free market, yeah
 However, the expectation about the future is what determines the price of any financial asset.

As nobody knows the future about cryptocurrencies, it's high volatile.

Bitcoin is not as volatile as other altcoins, because its older, more stable, more resilient... It's future is more certain than others

That's why a bad news for bitcoin may cause a small drop in its price but crash the others, because their future is too uncertain.

Let's just say yes and no. In an ideal world, the price would be influenced only by supply and demand, but the market is not an ideal place. The market is speculators, manipulators and shullars in huge quantities. Naturally, there are normal buyers and sellers, but such a minority. Therefore, the market has very different laws.