Traders are always concerned about the volatility of Bitcoin. It is important to know what makes the value of this type of digital currency change. Like many other things, the price of Bitcoin depends on the rules of supply and demand. If the insistence on ‘bitcoin’ increases, the cost will also increase. On the other hand, as the demand for Bitcoin decreases, so will demand. Simply put, the price is determined by how much the stock market is willing to pay.
It is noteworthy that the value of ‘Bitcoin’ can fluctuate compared to highly established assets and currency types. This fact may be due to its small market size, which means that a small amount of money can drastically change the value of Bitcoin. These collisions will decrease naturally over time as the currency grows and so does the size of the market.
After being ridiculed in late 2016, ‘Bitcoin’ hit a new high record in the first week of this year. There may be several reasons why Bitcoin is volatile. Some of these are discussed here.
Wrong compression factor
Bitcoin users are shocked by various news events, including statements from government officials and political events that could affect Bitcoin. This means that the level of ‘bitcoin’ acquisition is hampered by bad or bad news. Various bad news has created fear in investors and prevented them from investing in such digital investments. An example of bad news in the news is the prominent use of ‘Bitcoin’ in processing drug transactions on Silk Road, which ended when the FBI closed the market in October 2013. ‘Prices are very good. On the other hand, veterans of the trading industry have seen tragic events as evidence that the ‘bitcoin’ industry is thriving. Bitcoin, therefore, began to gain its own growing value as soon as the effects of negative pressure disappeared.
Another good reason for the ‘Bitcoin’ price change is the volatility of the virtual value of Bitcoin. You probably know that this digital currency has fields like gold. It is driven by the design decision of basic technology manufacturers to limit production at a fixed price, 21 million BTC. Thanks to this feature, investors can share more or fewer assets in ‘Bitcoin’.
News about security breaches
Various news organizations and digital media play an important role in creating negative or positive emotions in society. If you see something that is advertised in a profitable way, you may be able to do it without paying too much attention to the negative aspects. There are rumors of Bitcoin security breaches and this has forced investors to think twice before investing their hard-earned money in Bitcoin trading. They are at risk of opting for any ‘bitcoin’ investment platform. ‘Bitcoin’ could change if the ‘Bitcoin’ community raises concerns about security in order to create an open-source response in the form of security fixes. Such security concerns make much open-source software like Linux. Therefore, it is commendable that the developers of ‘Bitcoin’ should expose the security risks to the general public to develop robust solutions. SINGAPORE DIGITAL EXCHANGE will provide you with excellent benefits.