Bitcoin is one of the most highly volatile assets on the market, but it has also been among the most profitable. Bitcoin has seen incredible growth over the past few years and is now at an all-time high. The value of a single Bitcoin has gone from around $1,000 to over $20,000—a meteoric rise that’s seen many investors take notice. For more information sign up for the app.
Why are Bitcoins volatile?
Do you know the reason behind the fluctuations in the value of Bitcoin? Most of it is due to the confusion surrounding Bitcoin since it is the more viable form of currency or wealth storage. But, there are a few skeptical individuals who get scared due to the fluctuations in the cost.
However, several public individuals emerged from the shadows expressing their better emotions regarding the cryptos, which indicates the trend toward the thinking regarding the cryptos.
In the financial sphere, there are fluctuations in asset costs referred to as volatility. The consistent rise and drop of the costs in the wide ranges are healthier. The extreme swings in the price are the other manifestations since these are the variables contributing to the volatility of the costs.
How Bitcoin volatility affects trading?
It is a real fact that Bitcoin has become widely used globally. However, Bitcoin today is primarily used by traders and investors on platforms like cryptotrader to profit from the daily price fluctuations in the market. The traders are from a single group of people who never question the volatility of cryptos since volatility drives profits for the traders taking advantage of these fluctuations and turning them into profits.
In the period between January 2018 to June 2019, the cost of Bitcoin changed to an average of daily 2.67%. Throughout time, traders benefit from the daily cost fluctuations, and the volatility is about six times greater than the fiat or gold currencies.
Trading in Bitcoins- What you should know
Before you step forward to invest in Bitcoins, let’s get to know what they are exactly.
Bitcoin is a type of cryptocurrency. Cryptocurrencies are digital tokens that can be sent over the internet for free or for a fee, depending on who you’re sending it to and how much you want to pay. The more people who use it, the more valuable it becomes—and that help drive up its price.
There are currently about 16 million Bitcoins in circulation, and they’re worth about 6 billion dollars each. That means that if you had 1 Bitcoin worth $10,000 today, you’d have about $1 million in your pocket!
That’s why people are so interested in buying into Bitcoin: because it’s so volatile and so profitable!
There are users on the website advised to invest in cryptos, specifically Ethereum and Bitcoin. There are prominent cryptos from where you start profiting from the effect of the networks. A greater number of people are aiming to invest in Bitcoin since it has several holders who help them invest decently.
Factors determining the price of bitcoin
The cryptos are driven by exchanges consisting of a blend of demand and supply. The main difficulty is that several million dollars of bitcoin transactions occur daily, which is never genuine. As noted by the research, the bitcoin market is continuously rife regarding washing trade involving manipulating the market in whatever the party is buying and selling commodities for exaggerating the volumes of transactions.
At the end of the day, if you are planning to invest in Bitcoins, note that it is, no doubt, a highly volatile currency, but it’s also one of the most profitable. If you think about it, volatility is a feature, not a bug. Volatility makes bitcoins extremely valuable because it means that there are fewer bitcoins out there than people think. And that means that when one of them does hit the market, it can be worth hundreds or even thousands of dollars!
But despite all its wild fluctuations in value and its tendency to move up and down, Bitcoin is pretty stable compared to other currencies like the US dollar or gold. You might not get rich overnight by holding onto Bitcoins—but you’ll probably end up making some serious money over time.