Why does the value of Bitcoin fluctuate greatly (why does the price of Bitcoin fluctuate)
Why does Bitcoin value fluctuate greatly? The price of Bitcoin fluctuated sharply between July and the end of September 2019, but based on current statistical data, its trend is very obvious The price of Bitcoin has been in a state of high volatility since early 2018. The third quarter of 2018 was one of the worst performing major months for BTC, and trading volume decreased by more than half compared to the previous two quarters; In the fourth quarter, there was a significant decline, with a drop of about 70% as of mid August (green part in the figure) Why is this situation happening Firstly, it is because the value of Bitcoin fluctuates greatly; Secondly, factors such as Bitcoin’s strong risk resistance as a monetary attribute and investment asset itself affect the development of the crypto market. As more and more investors begin to understand the development trends in this field and the economic benefits brought by Bitcoin, its impact on the entire financial market is also expanding, especially when it comes to traditional financial fields
Why Bitcoin Prices Fluctuate
Editor’s Note: This article is from Caiyun Blockchain (ID: cybtc_com) and is authorized to be reprinted by Daily Planet The recent market trend of Bitcoin is one of the most attractive factors surrounding it: since October 12th, the price has been continuously rising, but this time it suddenly fell by nearly 80% at the end of November. Although Bitcoin prices are currently at historic lows, this phenomenon is not surprising: if Bitcoin can maintain its value and continue to rise, it is likely to experience some significant fluctuations. Why did such fluctuations occur? We can summarize the reasons into several factors:
First, in the bull market in 2017, investors all want to buy Cryptocurrency at a higher than average price; Secondly, there is a high demand for digital assets, so many people believe that Bitcoin will be more adopted as a payment method and investment portfolio management tool; Once again, it becomes increasingly popular over time Finally, due to various positive stimuli, the price of Bitcoin has skyrocketed significantly. Many large institutions, including the Chairman of the US Securities and Exchange Commission, Gensler, have also participated in this market, driving up prices, such as Michael Saylor, founder of Grayscale and CEO of MicroStrategy. These are all reasons for the gradual maturity of the market, Moreover, the influx of these funds has given the market more motivation to embrace Bitcoin, thereby promoting market growth and further development of the mainstream financial industry. But to understand why there has been such a high increase? According to CoinMarketCap data, as of mid July 2020, there were a total of 522000 active wallet addresses worldwide holding over $3 billion in assets, of which approximately two-thirds belonged to exchange users; The rest belong to miners or individuals. Therefore, it can be said that when the price of Bitcoin exceeds $10000, there will be more trading activity and speculative behavior. Another key point is that compared to the past year, the price of Bitcoin has not changed much this year In addition, there has been no significant change in Bitcoin prices since late August. Despite the recent pullback in Bitcoin prices, there are still some long-term coin holders who remain optimistic On the other hand, the total number of BTCs stored on the Bitcoin network is still close to 100 million, indicating that members of the Bitcoin community believe that the supply of Bitcoin will increase in the coming years. In other words, everyone on the Bitcoin network can have their own private key and also use their private key for operations. This allows any party on the network to view their ledger records anytime, anywhere – and even send them to others via email In addition, Bitcoin’s cybersecurity issues were also a major driver of this issue, especially in the bear market of 2018 Before the end of last year, the Bitcoin network had undergone multiple upgrades and a new version was added in early 2019.
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