Hello guys, In 2017, Bitcoins price soared from 1,000 usd to just under 20,000 usd before dropping down to around 13,000 usd at the end of the year. Since then, its value has risen and dropped sporadically from day to day. now its around 8,300 usd. So what may cause this drastic change of bitcoin value ?
There are various reasons which explains the volatility of bitcoin in the market, namely:
- Due to its decentralized nature, no department or government institution has total control over its transactions and regulations in the market. Unlike the other investment mechanisms (like stocks, golds, bonds, treasury bills, etc.), they are backed upon by a government institution which regulates its function in the country;
- Government prohibitions and country implementations which are prejudicial to the cryptocurrency world affect bitcoin's price- which explains its volatile price;
- Large trading companies and famous investors that release (bias?) statements about bitcoin influence the will of investors in acquiring bitcoin, which makes the market supply and demand erratic; and
- Media has an significant impact on attracting new investors and retaining old ones as they disperse the information- which may be manipulated depending on the country of each.
Above are some of my opinions based on my experiences with its volatility. The way to handle its volatile nature is to treat it as an opportunity to acquire more rather to see it on a negative aspect. Never miss the chance acquire more in order to maximize the yielding of income in the future.