Why the price of Bitcoin change more than traditional currencies?

[Victorycoin]

Bitcoin is a decentralised currency and not controlled by anyone. So it is subject to price fluctuations. But fiat is totally controlled by the respective governments. So, when there is a chance of great fall in fiat price, the respective governments change their policies to control the price fall. So, fiat prices does not change more like bitcoin.

That's not true, fiat currencies fall pretty often too. If you'd look through past history you'd see that almost every country had a period of inflation at one point. Right now it's Venezuela where their currency, Venezuelan Bolívar, losing its buying capacity faster than BTC in 2014.

Yes fiat currencies do change big time either from inflation, recession, depression, etc. Printing of fiat currencies from thin air by the governments, is actually one such moves to counter price falls, but which most often end up creating more problems than the much it aimed to solve. Bitcoin however is limited in supply and its decentralized nature leaves it responding to changing market forces.

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[deisik]

I noticed that the price of Bitcoin change much like all altcoins.
But the price of other traditional currencies like the euro, for example, are stable and do not change much.

Because Bitcoin is mostly used as a vehicle for speculation, not as a means of exchange (unlike traditional currencies)

Honestly Bitcoin's market capitalization is very small (at about US $14 Billion) when compared to the large amount of fiat currency notes in circulation. This often leads to higher volatility cause bigger whales can infuse and dump a lot of cash causing the price fluctuations. There was this large infographic somewhere online that showed how small Bitcoin's market cap was compared to other currencies that show stable values when compared to Bitcoin's price

Bitcoin may be tiny when compared with the US dollar or Euro (and other major currencies out there)

But even with this market cap Bitcoin is in the upper half of the list of all countries if we ordered them by the amount of money in circulation (in dollar terms). The problem is the Bitcoin market cap is utterly misleading itself since only a minor part of all bitcoins mined so far gets actually circulated (traded or used as a currency and casino chips), The rest is stashed away and doesn't circulate. Indeed, that makes the price higher, though it can be detrimental to Bitcoin in the long run

[whizter]

Bitcoin is a decentralised currency and not controlled by anyone. So it is subject to price fluctuations. But fiat is totally controlled by the respective governments. So, when there is a chance of great fall in fiat price, the respective governments change their policies to control the price fall. So, fiat prices does not change more like bitcoin.

That's not true, fiat currencies fall pretty often too. If you'd look through past history you'd see that almost every country had a period of inflation at one point. Right now it's Venezuela where their currency, Venezuelan Bolívar, losing its buying capacity faster than BTC in 2014.

Yes fiat currencies do change big time either from inflation, recession, depression, etc. Printing of fiat currencies from thin air by the governments, is actually one such moves to counter price falls, but which most often end up creating more problems than the much it aimed to solve. Bitcoin however is limited in supply and its decentralized nature leaves it responding to changing market forces.

to me actually more and more people are entering in the field of bitcoin and they are investing their assets here which increase the demand of bitcoin which ultimately increase the price of bitcoin.

[hisuka]

In my own opinion, bitcoin price change more than traditional currencies because its not part of traditional currencies. As what we can observe, day by day people are getting bitcoin to invest. We can notice that their is price speculation, the dumpers and pump of bitcoin. However, Bitcoin is volatile and decentralized coins and not being controlled by certain people.

[danherbias07]

Bitcoin is a decentralised currency and not controlled by anyone. So it is subject to price fluctuations. But fiat is totally controlled by the respective governments. So, when there is a chance of great fall in fiat price, the respective governments change their policies to control the price fall. So, fiat prices does not change more like bitcoin.

That's not true, fiat currencies fall pretty often too. If you'd look through past history you'd see that almost every country had a period of inflation at one point. Right now it's Venezuela where their currency, Venezuelan Bolívar, losing its buying capacity faster than BTC in 2014.

Yes fiat currencies do change big time either from inflation, recession, depression, etc. Printing of fiat currencies from thin air by the governments, is actually one such moves to counter price falls, but which most often end up creating more problems than the much it aimed to solve. Bitcoin however is limited in supply and its decentralized nature leaves it responding to changing market forces.

to me actually more and more people are entering in the field of bitcoin and they are investing their assets here which increase the demand of bitcoin which ultimately increase the price of bitcoin.

But still there are some losses whenever there is a price drop. When one person suddenly decides to buy bitcoin. Example is when it is at its peak at $1000+ there might be some who just started and buy coins and regrets it afterwards. This are the losses of users that we cant control but somehow we can make it right through proper explanation.

[olubams]

I think the answer to that is pretty simple. With my little knowledge of economics and even the exposure I have about bitcoin, I will say its due to the penetration bitcoin is still getting in the sense that no matter how popular bitcoin is today, its still growing and not the whole citizen knows about it and everyday we get new entrant. So this to a large extent explains the reason for the high volatility but the moment the rate of entrants is not as much as we now have enough population, then we should expect more stability compare to what we are having now...

[Mario274]

Bitcoin is a decentralised currency and not controlled by anyone. So it is subject to price fluctuations. But fiat is totally controlled by the respective governments. So, when there is a chance of great fall in fiat price, the respective governments change their policies to control the price fall. So, fiat prices does not change more like bitcoin.

That's not true, fiat currencies fall pretty often too. If you'd look through past history you'd see that almost every country had a period of inflation at one point. Right now it's Venezuela where their currency, Venezuelan Bolívar, losing its buying capacity faster than BTC in 2014.

Yes fiat currencies do change big time either from inflation, recession, depression, etc. Printing of fiat currencies from thin air by the governments, is actually one such moves to counter price falls, but which most often end up creating more problems than the much it aimed to solve. Bitcoin however is limited in supply and its decentralized nature leaves it responding to changing market forces.

to me actually more and more people are entering in the field of bitcoin and they are investing their assets here which increase the demand of bitcoin which ultimately increase the price of bitcoin.

But still there are some losses whenever there is a price drop. When one person suddenly decides to buy bitcoin. Example is when it is at its peak at $1000+ there might be some who just started and buy coins and regrets it afterwards. This are the losses of users that we cant control but somehow we can make it right through proper explanation.

lose by falling prices on the Bitcoin mainly those who do not have experience in cryptocurrency trade. And those who have weak nerves, and those who can not wait

[marcoman22]

Bitcoin is a digital currency which is mainly created for decentralisation. It is not controlled by any one. Its value is determined by its demand and supply. If demand increases, bitcoin value increases and if demand decreases than supply, then bitcoin price decreases.But situation is totally different in fiat currency. It is totally controlled by the respective governments. When the value of fiat currency decreases, government takes appropriate measures to retain its currency price.But in bitcoin, there is no one to regulate it since it is a decentralised currency.

[virusasog]

In my own opinion, bitcoin price change more than traditional currencies because its not part of traditional currencies. As what we can observe, day by day people are getting bitcoin to invest. We can notice that their is price speculation, the dumpers and pump of bitcoin. However, Bitcoin is volatile and decentralized coins and not being controlled by certain people.

Bitcoin value is volatile but i think this pump and dump is depending on the due to supply and demand. I wish any country should adopt the Bitcoin and start the digital currency revolution.

[Harlot]

In my own opinion, bitcoin price change more than traditional currencies because its not part of traditional currencies. As what we can observe, day by day people are getting bitcoin to invest. We can notice that their is price speculation, the dumpers and pump of bitcoin. However, Bitcoin is volatile and decentralized coins and not being controlled by certain people.

Bitcoin value is volatile but i think this pump and dump is depending on the due to supply and demand. I wish any country should adopt the Bitcoin and start the digital currency revolution.

Right now the biggest factor affecting it because there is no government controlling it. Fiat currency is stable because every countries' government control the supply of Fiat in which it also affects it's value. We all know that Bitcoin is independent in any form of government that is why the supply and demand is uncontrollable.

[severaldetails]

In my own opinion, bitcoin price change more than traditional currencies because its not part of traditional currencies. As what we can observe, day by day people are getting bitcoin to invest. We can notice that their is price speculation, the dumpers and pump of bitcoin. However, Bitcoin is volatile and decentralized coins and not being controlled by certain people.

Bitcoin value is volatile but i think this pump and dump is depending on the due to supply and demand. I wish any country should adopt the Bitcoin and start the digital currency revolution.

Right now the biggest factor affecting it because there is no government controlling it. Fiat currency is stable because every countries' government control the supply of Fiat in which it also affects it's value. We all know that Bitcoin is independent in any form of government that is why the supply and demand is uncontrollable.

Bitcoin is an unregulated market.
Everybody can enter or leave as he pleases. There is no government behind it that would manage the capital flow in and out of bitcoin.
When somebody with enough capital enters, the market reacts. The same happens if he leaves.
With bitcoin, 'enough' money to make the market react is reached much easier than it can be acheived in fiat markets.

[ASHLIUSZ]

In my own opinion, bitcoin price change more than traditional currencies because its not part of traditional currencies. As what we can observe, day by day people are getting bitcoin to invest. We can notice that their is price speculation, the dumpers and pump of bitcoin. However, Bitcoin is volatile and decentralized coins and not being controlled by certain people.

Bitcoin value is volatile but i think this pump and dump is depending on the due to supply and demand. I wish any country should adopt the Bitcoin and start the digital currency revolution.

Right now the biggest factor affecting it because there is no government controlling it. Fiat currency is stable because every countries' government control the supply of Fiat in which it also affects it's value. We all know that Bitcoin is independent in any form of government that is why the supply and demand is uncontrollable.

Though it is decentralized, which means its not under control of a central authority the open source programming runs based upon several algorithms which at times have dependence upon world market movements. Recently too based upon the market variation happened due to inspections in China's bitcoin exchanges the economy just gave a shake which too made an impact on the bitcoin price. This is the reason for difference in price variation happening between bitcoin and traditional currencies.

[coinplus]

Though it is decentralized, which means its not under control of a central authority the open source programming runs based upon several algorithms which at times have dependence upon world market movements. Recently too based upon the market variation happened due to inspections in China's bitcoin exchanges the economy just gave a shake which too made an impact on the bitcoin price. This is the reason for difference in price variation happening between bitcoin and traditional currencies.

Still the only thing that determines the price of the bitcoin is the users who use it, if people creates more demand then we can see prices getting flying. Based changes of demand, the price fluctuates. The price of the bitcoin is highly fluctuating compared to other currencies is because the bitcoin is not being controlled by any central authority to calm down traders on any unexpected events.

[andrei56]

The price of bitcoin is not as volatile, but one of the reason is simply volume, bitcoin does not move as much volume as the dollar or the euro so it is easier to manipulate.

[Superways]

I think the answer to that is pretty simple. With my little knowledge of economics and even the exposure I have about bitcoin, I will say its due to the penetration bitcoin is still getting in the sense that no matter how popular bitcoin is today, its still growing and not the whole citizen knows about it and everyday we get new entrant. So this to a large extent explains the reason for the high volatility but the moment the rate of entrants is not as much as we now have enough population, then we should expect more stability compare to what we are having now...

You have a right point for explaining the fluctuations in the price of bitcoin. The coming up of more bitcoins to the market the adoption of bitcoin by more people and sudden sale of bitcoin by more people to the market actually increase and decrease the price. That is why we say hold your coins as with holding the supply decrease and the demand increases.

[Taki]

The history of the bitcoin price for the 2016 year can be rightfully entered into the books. During the year the price rose more than 80%, and despite some sharp fluctuations, we can clearly see the bullish trend. Bitcoin price increased from 430$ for the beginning of 2016 to 950$ to its end.
Exchange rate volatility is a response to some global events, including the decision of people in the UK about leaving the EU, the hacking of the Bitcoin exchange Bitfinex, as well as halving the rewards for mining, because of which the number of new bitcoins in each block was reduced from 25 to 12.5 BTC.

[agamasrori]

The price of bitcoin is not as volatile, but one of the reason is simply volume, bitcoin does not move as much volume as the dollar or the euro so it is easier to manipulate.

Yes you are right.  if bitcoin spread and circulation is better than now, bitcoin price will more stable. If many people just hold bitcoin, the hoarder can easily influence bitcoin price.

[Red Fish]

Bitcoin user market is much smaller, if we compare with traditional currencies, like EUR. Bitcoin have 11+ million users, EUR 338+ users, so you see EUR have much more users than Bitcoin. And Bitcoin have most probably some big players, which buy and sale. EUR is too large, investors do not have enough capital for large buy/sale deals.  

[zidanw]

the price of a bitcoin is determined by supply and demand. When demand for bitcoins increases, the price increases, and when demand falls, the price falls. there is only a limited number of bitcoins in circulation and new bitcoins are created at a predictable, which means that demand must follow this level of inflation to keep the price stable. Because Bitcoin is still a relatively small market compared to what it could be, it doesn't take significant amounts of money to move the market price up or down, and thus the price of a bitcoin is still very volatile.

[whizter]

The price of bitcoin is not as volatile, but one of the reason is simply volume, bitcoin does not move as much volume as the dollar or the euro so it is easier to manipulate.

Yes you are right.  if bitcoin spread and circulation is better than now, bitcoin price will more stable. If many people just hold bitcoin, the hoarder can easily influence bitcoin price.

currently people are using bitcoin as investment, therefore they are mostly holding bitcoin so that they can get better price and then sell it with profit, but when bitcoin will be start as currency then trend of holding bitcoin will a little decrease and hope that the price of bitcoin will become more stable.