Bitcoin is decentralized. Because of this, it can go up or down related to supply and demand. Other cryptocurrencies like Ethereum are run by a company, making them much less volatile compared to Bitcoin. Check more about the guidelines for android user to store bitcoin.
Bitcoin Supply & Demand
The supply of Bitcoin is mathematically limited, all the way up to 21 million. This means that fewer bitcoins in circulation can affect the market. There are various demand factors for bitcoin. Some people see it as a store of value due to its scarcity, and others invest in it hoping for gains because the price goes up every day.
Bitcoin Volatility is Slowing Down
Looking at Bitcoin’s historical price data, it is evident that volatility slowed down over time. For example, at the beginning of 2017, Bitcoin prices ranged from 1,200 to 2,000 USD on most days. Nowadays, big moves are only observed once in a while. It also means that you can use Bitcoin as a currency for your daily needs without the need to wait for price fluctuations.
Are There Any Technical Factors That Affect Bitcoin’s Price?
The bitcoin price depends on its demand relative to supply, but some technical factors are significant. Some are referred to as FUD (Fear Uncertainty and Doubt) which can trigger massive downward price pressures, and others as FOMO (Fear Of Missing Out), which can drive the price up just as fast.
Bitcoin Technical Indicators
There are various bitcoin technical indicators that investors look at before deciding on their next move. These indicators include Volume, Relative Strength Index, MACD, Moving Averages, Average Directional Index, Average True Range.
Bitcoin is not regulated. It has been gaining momentum over the years, and it’s now getting more and more attention from governments, banks, and financial institutions trying to understand how to deal with this cryptocurrency that could disrupt their current business model.
Bitcoin Regulations Around The World
Some countries, like China and Russia, are where Bitcoin is completely banned. But other jurisdictions clearly stated their positions regarding cryptocurrencies, including the USA, where cryptocurrency cannot be considered a security or commodity but a property. In Europe, cryptocurrencies fall under anti-money laundering and financial terrorism laws.
Bitcoin Threat To Fiat Currency- Bitcoin Volatile
People are moving their money into Bitcoin because they want to change the world‘s financial system. Some people think that cryptocurrency could be an alternative to fiat currency, which can significantly impact its value. However, this means that it is volatile and hazardous, so do not invest more than you are willing to lose.
The recent Bitcoin rally is due to several reasons. In 2013, Bitcoin was valued at only $200, and only recently has it reached almost $20k per coin. With such a dramatic increase in value, many people want to buy Bitcoin, assuming that they will profit from their investment. Unfortunately, this causes further inflation and can cause Bitcoin to be even more volatile.
Bitcoin is still in its infancy, so the volatility will likely remain for some time. However, with an increase of users, exchanges, and other services accepting Bitcoin, it is expected the volatility will decrease over time. For now, though, investors cannot avoid market volatility when they buy Bitcoin.
Are Cryptocurrencies The Future?
With Bitcoin leading the way, cryptocurrencies are becoming increasingly popular. Because of this, their use may become widespread. However, there are still many detractors who believe Bitcoin will eventually burst. While Bitcoin may not be perfect, it opens the door to more crypto-friendly laws. If you’re looking to get into the world of cryptocurrency, then you’ll definitely want to check out swyftx.com. They’re one of the trusted cryptocurrency exchanges.
The Winklevoss twins recently had their Bitcoin ETF application approved by the SEC. This has sparked excitement because it could bring in institutional investors to stabilize the cryptocurrency market. The approval of this ETF may affect the volatility of Bitcoin, for better or for worse.
Conclusion: “Bitcoin — and all of its digital brethren — may still be nascent, but their influence is becoming ever more apparent, and the market will continue to grow.”