Why Bitcoin Is So Volatile

[Zeque02]

I have always been asking myself the same question on why Bitcoin is so volatile. I compared it to Ethereum which is the second best Cryptocurrency and Bitcoin Cash. I came to notice something, and that is, despite Ethereum being steps ahead of Bitcoin Cash in the market and having a huge market cap, Bitcoin Cash was still more volatile than it. I just concluded that the reason Bitcoin itself was very volatile is because there are lots of demand for it and the supply rate is low. But after reading this article, I’m a little bit confused.

One factor that makes bitcoin volatile are the investors who decided to cash out their investment in the reason of they want to get some of their losses and some are because they are contented of the amount or emergency purposes.

[BennyK]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

Yeah, it is the volatility nature of Bitcoin that made it rise massively to $23K some few months ago. This is a good property of Bitcoin as it makes the market demand goes up and create more market niche for the crypto world. Let's appreciate the good side of the volatility nature for once.

[INGOT Brokers]

Bitcoin has value and that is because people gave it value when they decided to invest in it. The pereception of alternative investment for people has changed from traditional to the new Crypto universe

[Epimetheus]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

Yeah, it is the volatility nature of Bitcoin that made it rise massively to $23K some few months ago. This is a good property of Bitcoin as it makes the market demand goes up and create more market niche for the crypto world. Let's appreciate the good side of the volatility nature for once.

It is very simple to explain.Bitcoin's price depends on the forces of demand and supply.If the demand is high then the prices will definitely rise.On the other hand if the supply is more then prices will fall down.Prices also depend on how much people invest in bitcoin.If more people invest in it then for sure its price will rise or otheriwse vice versa will happen if investment is less.Another reason is if people hold or release their bitcoins in the market.Bitcoin has a very huge market too compared to any other cryptocurrency.

[Safebit.io]

Clueless article. I wonder if they intentionally mislead the public as to how financial markets work.

The stock market doesn't have a baseline. The stock market has regulators with the tools to control it, to a certain degree. The FED, government and banks have the power to keep the prices of assets above a certain threshold especially in times of crisis. This often happens at a great cost. But that's what keeps the markets stable for most of the time.

Bitcoin is volatile because it is unregulated and not controlled by any specific institution. That's also why price manipulation is as rampant as it is for BTC.

[S4roZa]

Because bitcoin presents various opportunities that did not exist prior to its development. But it has failed to turn investors who are concerned about the extent of its potential adoption as an alternative currency.

[Dudeperfect]

I am not expecting Bitcoin to remain stable more than a month anywhere in next 5 to 10 years. At this point, not even 10% of the world's population is using Bitcoin so considering the small sustainable growth, the user base and indirectly the price will keep increasing. On the other hand if something goes wrong in the core area then price and user base will fall down and we won't have the stability at any given point.

[tambok]

The advantage and disadvantage that I am seeing here why bitcoin is so volatile is because it is decentralized, no one owns and handling it, no one will care how much you are going to invest and how much, as well as in withdrawing your investment there is no limit nor maximum in withdrawing your funds.

[OrangeSeller]

Not only Btc but also the other crypto and shares are volatile.Because it's structure is like that.None in the market corporate world can be made fixed.These are influenced by different variables,so it's price is always variable.Sometimes rising, sometimes falling the price.Demand and supply are very important in this case but in additional to the international market, economic recession, consumer purchasing power, intereste and speculative impacts work much more.

If you are there in the world of crypto currencies and that you understand all the things related to any of the crypto currency and the way they work, then I think so you will have no problem in understanding this volatile nature of any of the crypto currency, this volatile nature of bitcoin is just because of the reason that its market value is very much dependent on the demand and supply rate.

[shinchan123]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

I think bitcoin is so volatile because of the fact that there are many factors contributing to it, such as demand from the people the other cryptocurrencies that it beats. The more there are competitors for bitcoin, the more it’s value rises. In an economics class there are theories for this scenarios, although I have forgotten the exact term for it.

[Harleybtc01]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

I think bitcoin is so volatile because of the fact that there are many factors contributing to it, such as demand from the people the other cryptocurrencies that it beats. The more there are competitors for bitcoin, the more it’s value rises. In an economics class there are theories for this scenarios, although I have forgotten the exact term for it.

There are a lot of factors that would make bitcoin volatile. Few are as follows:

1. Rate of adoption is hampered by bad press
2. Bitcoin's perceived value fluctuates
3. Too much variance in perceptions of Bitcoin's store of value and method of value
4. Little option value to large holders of the currency
5. News about security breaches make investors react
6. Bitcoin’s high profile losses at are another driver of volatility
7.Bitcoin and foreign direct investment in countries with high inflation
8. Tax treatment of Bitcoin also affects the volatility

In the near time, much of the volatility will be driven by investors perception of the ability of gateways to safeguard individual holdings and provide for a reliable store of value as adoption increases.

 

[DPrillio]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

I think bitcoin is so volatile because of the fact that there are many factors contributing to it, such as demand from the people the other cryptocurrencies that it beats. The more there are competitors for bitcoin, the more it’s value rises. In an economics class there are theories for this scenarios, although I have forgotten the exact term for it.

Certainly the factors affecting bitcoin volatility is the changes of market demands and supply because the fact that bitcoin market capacity is having a limited amount so it easily to fluctuate with respect to market changes, therefore its truly like the significance of the law for the supply and demand.

[kyucryp]

The volatility of bitcoin is due to its less availability of only 21 million when compared to the fiat money of US dollar,its availability is four trillion.So the difference is very big between the crypto and fiat,so there is a little change in the demand and supply will change the price which resulted in the often price change.
But the price volatility is the main reason that people don't use it as a currency and merchants afraid to accept as a payment because the merchants will lose their profits when the price falls.So we need to support altcoins too to get the stability in price of bitcoin.

yes I agree with you the cause of bitcoin volatility is its limited amount. the volume of bitcoin present on the market today is about 16.7 million coins this is much different from the amount of US dollars in circulation. because of the bitcoin bit circulation volume then when someone buys or sells bitcoin in a large price then the price will move extremities. and bitcoin volatility is also affected by demand and supply.

[DaftAjax]

I don't buy that argument that Bitcoin is volatile because it has no intrinsic value to be backed upon. Nothing is backed by anything substantive! Fiat is backed by the monopoly power of the state, gold is backed by the social capital given to it. If Bitcoin's lack of physical asset backing was a problem, all currencies would be volatile.

Bitcoins volatility is not new in financial history. Earlier forms of currency like tobacco used in the early American colonies were much more volatile. Bitcoin's instability is just a demonstration of the market. Hype led to speculators buying up the supply, and scares by regulators and panic sellers caused price drops.

There is nothing intrinsic in Bitcoin, besides maybe slow and expensive transactions coming to the fore, that makes it volatile. It is a commodity, and like any commodity, is a slave to market forces - let it be euphoria or panic.

I would disagree. Digital currency and earlier form of currency like tobacco has huge difference from now and then. The argument is about "why Bitcoin is volatile?" so we already assumed that it is volatile. First, volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. Well since that cryptocurrencies are decentralized, every coin would just be flying around the blockchain. And because no one is responsible for the sudden changes in its price, there is a very high chance of having a dramatic increase or decrease of prices overtime, without any relation to other factors such as season.

You're right, all currencies are volatile, but the type of volatility that other currency have like fiats - they have low volatility meaning their value changes very slowly and the growth is somewhat steady. Unlike cryptocurrency they're high volatility.

[Marina17]

I think no one knows exactly how to evaluate bitcoin. In addition, a certain number of people manipulate its price. It's not fair to the rest of us.

[naidray]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

This is an old stuff, I have read a hundred times and sick of reading it over and over again. Every author just keeps saying whatever nonsense it is that comes to their mind just to gain whatever it is they plan for. Yes we know that Bitcoin is volatile because of people invest a lot of money and withdraws when they have made huge profits. Well, it’s a normal thing in this business and can also be found in most business out there.

Bitcoin is volatile, and being volatile is what helps most of us make profit. Those who are quick and smart will always invest at the right and also withdraw when it’s right to avoid losing their money. There are always people manipulating the price. It’s left for you to play the game smart, if you can.

[tbterryboy]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

Actually we already experienced it no need to mention but yes sad to say it is now in the dump situation where all of us are already lose pur profit

There is another side of coin as well. We have to be sharp minded when things are going against our plans. Once the prices are going down, and if you have luckily invested in Bitcoins already, you got best chance to buy more. You need to be profit oriented and for that you must be vigilant and wise enough to see your hidden profits. Rest, leave everything on the luck and skill.

[BTCappu]

I have always been asking myself the same question on why Bitcoin is so volatile. I compared it to Ethereum which is the second best Cryptocurrency and Bitcoin Cash. I came to notice something, and that is, despite Ethereum being steps ahead of Bitcoin Cash in the market and having a huge market cap, Bitcoin Cash was still more volatile than it. I just concluded that the reason Bitcoin itself was very volatile is because there are lots of demand for it and the supply rate is low. But after reading this article, I’m a little bit confused.

Perfect, it is about fluctuations that made it easy for us to invest in this business and earn profit for ourselves. These are the arguments of the past and now everything is changed. Its volatility helps us to buy and after jumping the price due to demand increases make profit when we sell. Invest when its value is low and do not invest when its value is high would be in your benefit.

[bohr]

I have always been asking myself the same question on why Bitcoin is so volatile. I compared it to Ethereum which is the second best Cryptocurrency and Bitcoin Cash. I came to notice something, and that is, despite Ethereum being steps ahead of Bitcoin Cash in the market and having a huge market cap, Bitcoin Cash was still more volatile than it. I just concluded that the reason Bitcoin itself was very volatile is because there are lots of demand for it and the supply rate is low. But after reading this article, I’m a little bit confused.

The low supply of bitcoin makes bitcoin very volatile, after all when governments begin to see that the currency begin to revaluate and becomes too valuable they can just print more of it and it is something that is impossible to do with bitcoin and with must cryptocurrencies, that is one of the advantages of fiat but that advantage is also disadvantage since the governments can print as much currency as they want.

[so98nn]

https://www.forbes.com/sites/jayadkisson/2018/02/09/why-bitcoin-is-so-volatile/

Worth the reading.

The article is not worth reading at all because it rolls out the same old thing time and again because it started with the thing that btc is overvalued and has no value of its own as it is not backed up by any assest.The volatility can't be avoided in this case as liquidity in the market is too low and the prices are not stable.The more people when will know about bitcoin the more the prices will become stable with time. Unless we cant avoid this volatility.