What are the Vital Factors Responsible for the Volatility of Bitcoins?


If you have interest in the cryptocurrency market, then did you notice one thing? Volatility is very common among cryptocurrencies. Whenever it comes to Bitcoin Era, its volatility is something to be appreciated. During 2017, its price has undergone an appreciable rise. On the contrary, 2018 observed a massive sink of the market. Its remarkable return in 2019 confirmed about the ultra-volatile nature of this exclusive cryptocurrency.

Is it Beneficial to Determine the Factors of Volatility of Bitcoin?

You must have noticed that in general, almost all the cryptocurrencies are indexed to Bitcoin. It indicates that the fluctuation in the Bitcoin Erawill have almost the same effect on maximum cryptocurrencies. Until and unless you are able to determine the factors behind the fluctuations, it will become difficult to predict and understand the developments in the market of cryptocurrency. 

Staying novice about the decent happenings in the cryptocurrency market may put the investors in danger. It may finally result in an inappropriate reaction regarding buying and selling of cryptocurrency. It is high time to come across the vital factors that result in the fluctuation of the price of Bitcoin. Though the list is an unending one, below the major ones have been described. 

Top Factors that Result in the Fluctuation of the Price of Bitcoin 

The crypto market is prone to undergo positive and negative fluctuations. Volatility has both positive and negative effects. Pricing of Bitcoin a bit high may result in letting you some lucrative benefits of profits. But, you must be ready for the down side as well.

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Long-term investors that prefer holding the Bitcoin by considering it as a store of wealth may find it difficult to predict the overall future performances. As a going-to-be Bitcoin investor, it is high time for you to come across some top factors that may result in high level fluctuation of the Bitcoin price. 

1.No fixed regulation – The absence of proper regulation of Bitcoin is one of the vital causes that results in its high volatility. As it is hardly governed by any particular entity, this makes Bitcoin totally different from stocks and bonds. The price of this cryptocurrency is determined based on the rules of supply and demand. It may either attract or repel investor. 

As Blockchain technology is distributed across a wide range of variable systems all over the world, Bitcoin hardly has any centralized location of its own. Hence, it becomes difficult for regulatory systems in management of the operations. The recent restrictions that have been imposed by China has contributed to severe volatility in the prices of Bitcoins. 

2.Influence by the media – Media is another vital factor that results in influencing the price of Bitcoin. High rate coverage by leads on the media results in spreading out of popularity of the cryptocurrency. On the other hand, negative coverage by the media may result in an opposite effect on the price of cryptocurrency. 

It is vital to have a close look to the mass effect that has been the result of certain news in the media. The news items that you will be coming across can be discussed with your peer members. It will help in serving as eye-openers for investors. You may also refer the social networking sites to come across the latest news about Bitcoin.

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3.Regulatory changes by the Government – Bitcoin being a new concept for the governmental bodies makes it difficult in terms of adopting a middle-term position on the same. Governments are continuously changing the regulations that concern them in terms of taxation among the investors. 

It may be feared that the price of Bitcoin may get reduced sue to the statements by the government. The dropping of the price of the cryptocurrency in the beginning of 2018 is one of the most suited examples. Hence, it is always advisable to stay up-to-date with the latest news so that you can halt to the best decision. One must not overlook the influence of government decisions on the price of Bitcoin and other cryptocurrencies.

These are some vital factors that result in the fluctuation of the price of Bitcoin to a certain extent. Staying up-to-date with the latest news will help in making the right decision.

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