Bitcoin: Why is it volatile?

When people mention the word cryptocurrency, what comes to mind is Bitcoin (BTC). Known as the pioneer of cryptocurrencies, this asset has grown so much over the years. Now, there are a lot of companies and countries that have embraced its use and stunning value.

If you are familiar with Bitcoin, you might notice that its price is subject to change from time to time. You can see this by observing the coin’s bullish and bearish trends. The reason behind this is that BTC, like any other crypto, is a highly volatile asset.

Regardless if you use BTC to purchase, remit, or play crypto slots, it is important that you understand what makes it volatile.

Factors that contribute to BTC volatility

There are several factors which contribute to the price changes that BTC experiences. Some of these are:

Media reputation

One of the factors that mainly contribute to BTC’s price is how it is being perceived in the market. For example, reports of scams and security breaches will cause a huge price drop. On the other hand, appraisals of popular influencers who say a lot of good things about BTC will drive its value up.

Production costs

The entire process of crypto production as well as the struggles of miners also determine a coin’s value. This means that as a coin gets harder to mine, the higher its value gets. Given the challenging methods in mining BTC, it is no longer surprising to know that it has such a high value.

Regulations set per country

Different countries have set different rules and regulations when it comes to accepting crypto as an asset. With more countries starting to accept BTC as a form of legal tender, many people became interested in having one. This drives the value of the coin up. By being an established crypto, some countries that are strict about crypto still accept BTCs.

Law of demand and supply

People, in general, buy things that can be useful for them. The same concept applies when investing in BTC and other coins as the prices rise when they deem to be useful. By applying the law of supply and demand, the high demand for BTC and its low supply can drive the price of the coin up.

Reasons why you should invest in BTC

Is Bitcoin still a worthy investment despite its volatility? Absolutely. With that, here are some of the reasons that prove why it’s a great idea:

  • Popular → Regardless of how volatile BTC may be, it can’t be denied that it is still the most popular crypto to date. After having cemented itself in the crypto industry, you will know that it won’t lose its appeal in the years to come.
  • Valuable → BTC is regarded as the most expensive crypto. Despite several crypto crashes in the past years, it has remained at the top spot and it seems like it will be there for a long time. If you’re looking for a long-term investment, this still remains as a great choice.
  • Useful → There are a lot of things that you can do with BTCs. You can use it for day-to-day retail, luxurious shopping, remittances, and even for entertainment with the help of crypto slots, blockchain games, and the like.

These are just some facts that explain Bitcoin’s volatility and why it’s not much of a matter that should discourage you from investing in this remarkable asset.

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