Because of the following reasons:
- They have no intrisic value – Despite any other companies, cryptocurrencies don’t create a products, earn revenue, employ thousands of people or even return dividents – Because of this is it really hard to value them, we often rely on market sentiment which is influenced by the media.
- Lack of regulations – Even though governments are doing their best to regulate this space, it’s still in its early days – Limited regulations can easily allow anyone with a lot of holdings to manipulate the market.
- Lack of institutional capital – Banks and other institution are open to blockchain technology but haven’t invested, yet, large amounts of money which would soften the volatility.
Topic: why bitcoin is volatility? - page 14. (Read 1958 times)
There are broadly 2 reasons:
Bitcoin markets are fragmented
Unlike stock markets where a stock trades on few exchanges, bitcoin currently trades on ~400 exchanges. This cause liquidity to get trapped in these individual exchanges. As a result every time someone wants to buy/sell a large amount of Bitcoin, prices move significantly which causes the volatility.
Lack of regulations
Almost all bitcoin markets are currently unregulated. As a result, traders are able employ various trading strategies like ‘Pump and Dump’ to drive markets significantly in either direction. I regulated markets, these would not be allowed.
Bitcoin markets are fragmented
Unlike stock markets where a stock trades on few exchanges, bitcoin currently trades on ~400 exchanges. This cause liquidity to get trapped in these individual exchanges. As a result every time someone wants to buy/sell a large amount of Bitcoin, prices move significantly which causes the volatility.
Lack of regulations
Almost all bitcoin markets are currently unregulated. As a result, traders are able employ various trading strategies like ‘Pump and Dump’ to drive markets significantly in either direction. I regulated markets, these would not be allowed.
Bitcoin price instability is also driven largely by the various perceptions of intrinsic value of cryptocurrency as a store of value and value transfer methods.
Bitcoin as a store of value is a function by which assets can be useful in the future with several possibilities. The store of value can be stored and transacted with goods or services in the future. There are many online stores that accept buying and selling using Bitcoin.
The method of value transfer is an object or concept used to transmit property in the form of an asset from one party to another. The current Bitcoin price instability makes it an unclear added value, but promises almost no frictional value transfers.
Due to these two factors, the current Bitcoin spot price varies against the dollar and other fiat currencies. Bitcoin values can be swung based on news events as happened before compared to fiat currencies.
Bitcoin as a store of value is a function by which assets can be useful in the future with several possibilities. The store of value can be stored and transacted with goods or services in the future. There are many online stores that accept buying and selling using Bitcoin.
The method of value transfer is an object or concept used to transmit property in the form of an asset from one party to another. The current Bitcoin price instability makes it an unclear added value, but promises almost no frictional value transfers.
Due to these two factors, the current Bitcoin spot price varies against the dollar and other fiat currencies. Bitcoin values can be swung based on news events as happened before compared to fiat currencies.
There are several factors that cause volatility in the market such as bad news on behalf of Bitcoin. However, I believe that unregulated markets and lack of maturity are the biggest reasons for that. The market is not regulated so that anyone can trade any amount from different parts of the world and he can do it every time every day so that large volumes affect the price. A wave of panic trading and volatility for the aforementioned Bitcoin.Thanks #CMIIW
Bitcoin is volatile because of the fources of demand and supply for it and at the same time it is still a new currency that is yet to be known to so many people around the world that make it more volatile because of its high demand.
It is true. Demand and supply greatly affect the market price. Meanwhile, demand and supply are influenced by various factors, including rumours and news, speculation of traders and investors, and the issue of legality from various countries. That is why the price of cryptocurrency is very volatile.
Bitcoin is volatile because of the fources of demand and supply for it and at the same time it is still a new currency that is yet to be known to so many people around the world that make it more volatile because of its high demand.
Bitcoin is mostly based on the trader feelings and some manipulations from some group. The volatility has and will always be here
it happens because too many Factors in the perception of asset value and value of bitcoin therefore the value of bitcoin can rise sometimes also can go down and that is what causes the unstable bitcoin
I think the reason for the high volatility is very obvious. Those who have a lot of Bitcoin in their hands play at the market price whenever they want.
That is an excellent analysis. Bitcoin has no one to regulate the price and so the forces of demand and supply ultimately controls how much it will cost at a time. But let's not forget that there are people who hold massive amounts of btc and these people can easily influence the price of coin as well.
I think one of the factors that will affect the instability of Bitcoin's value and price is the presence of news that seems to frighten all Bitcoin users, as well as those new to join this Bitcoin, which includes geopolitical events and government statements that Bitcoin is likely to be regulated , and Bitcoin's price volatility is also driven by various perceptions of intrinsic value of cryptocurrency as a store of value and value transfer methods.
Based on the latter circumstance, it is not difficult to guess that the greatest volatility will be possessed by crypto-currencies with the lowest capitalization, especially "young" crypto-currencies similar to the etherium, or, especially, bitcoin, will greatly exceed them in "stability." The level of interest of rich traders in a particular currency, the situation in the market (growth, flattening or falling prices) and the overall saturation of the "glasses" for a specific trading pair also significantly affect volatility.
Bitcoin is said to be a good investment or not depending on how we look. If we look more on the negative side, it will say that bitcoin is not a good investment. If we look at more profits then we will say that bitcoin is a good investment. Now, I will only give you some reasons why bitcoin is votality. First, because of the small volume of bitcoin scattered in the network. Bitcoin will be able to soak its votality when the number of users more and the volume is scattered also higher. Second, the number of bitcoin traders are more than bitcoin users. When many traders then that happens is “panic sell” and “panic buy”. Third, globally spread news. Many people are easily affected so that it will follow the trend according to the number of news. The last is an investment fraud and bitcoin was brought away (hacked) by irresponsible people.
Because market is influenced by very little news. And pumper and dumper are take advantage of that and fluctuate the price so they can gain profit
I think that the market will be volatile until the niche is overregulated. This market can be severely ruined having 20-40t of bitcoins, although bitcoins are now in the network of millions 17. Speculation, just speculation.
I think It would be nice when bitcoin costs reach a high price value and the volatility level then increases, the amplitude of the fluctuation will be such that the bitcoin owner will not be able to withstand such a spectacle and will nervously sell it. Very likely panic. And what could cause panic?
, bitcoin volatility is mainly due to the fact that the price is not regulated as ordinary money. In every state, the central bank monitors the stable level of national money, issues additional bills on the market or withdraws them from circulation. Also, the rate of national money is strengthened by buying or selling foreign currency. Bitcoin, nothing set, the rate is determined only by the supply and demand ratio, and these parameters vary greatly.
Bitcoin volatility is because there is lot of manipulation by whales. This is more common in case of alt coins and thus I always avoid them.
So, why is bitcoin is volatility? The real reason why bitcoin prices are more volatile than other currencies is the absence of any entity that controls the price of bitcoin and bitcoin prices is determined by all those who have bitcoin (regardless of amount). If we have bitcoin at the moment, then we are one of those people who determine the price of bitcoin. If we suddenly sell all bitcoin, then the price will move down (because supply / supply now increases). Similarly, if we suddenly want to buy a lot of bitcoin, we have contributed to the amount of demand (demand) bitcoin, so the price will move up.
For my think for me, because of the huge advantage for investors. And i think the price of bitcoin are unstable because of the hackers, btc security and cryptocurrency is still lacking.
I think low liquidity is one reasons why Bitcoin so volatile.Having less liquidity instead of more can potentially exacerbate price fluctuations, making it so that the digital currency’s inevitable declines are more severe than they would be otherwise.
Price not being regulated is the main cause of volatility. But we should not forgot that it is possible to make so much money with btc only because of this volatility.
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