When people talk about Bitcoin, the issue of its volatility always come up.
What most people don’t know is that sometimes, volatility isn’t such a bad thing.
Today, we’re gonna be talking about the pros and cons of Bitcoin’s volatility!
What’s up cryptopeeps? It’s your girl Maria, here to deliver your daily dose of crypto news!
Just to get you up to speed on financial terms,
volatility is the rate at which an investment increases or decreases.
Simply put, it’s how drastic a price change is.
The more drastic the price change, the higher the volatility.
When an investment is volatile, it means that the price increases and/or decreases at a quick pace.
Let’s use Bitcoin as an example.
There have been times where Bitcoin’s price would drop a few thousand dollars in the span of a few hours.
At the same time, it could do the total opposite.
You could have Bitcoin at a certain price and its price could rise exponentially throughout the day.
So what makes Bitcoin’s price so volatile?
News, the opinion of highly influential people, brands investor FUD, FOMO, are some of the many factors.
If you want to learn more about what affects the price of Bitcoin,
you can check our video out on the factors that determine the price of bitcoin.
We’ll put it in the icon on the top right corner.
A lot of problems can come up when the price gets volatile.
First of all, it makes bitcoin trading a lot risker.
After investing in Bitcoin, your decision making will eventually be affected.
When you have a lot of money riding on something so unpredictable, it can mess with your head.
Some people end up panicking and making rash decisions with their investments
Another problem that comes up with Bitcoin’s volatility is the issue of adoption.
“Volatile” is a harsh word and it could affect the way the media presents crypto.
It could change the general perception of Bitcoin for the worse.
As bitcoin enthusiasts, adoption is something that could affect how digital currencies are used by the general public.
It’ll also change the way it’s recognized and regulated by governments and financial institutions.
I know you’re wondering…
“How can volatility even be a good thing?”
I know most of us have probably experienced the crippling doubt, fear, anxiety that comes with it…
and then the FOMO when the price starts going up…
And then you start wishing that you bought more Bitcoin when it was much cheaper…
And then you start thinking about how much money you could have made…
But Bitcoin’s volatility isn’t all bad.
There’s nothing quite like the feeling of making a profit from your investment.
The thrill of making even the smallest amount of money from Bitcoin is unlike any other.
Speaking of profit, Bitcoin’s volatility is one of the reasons day-traders can make a significant amount of profit!
The wide swings Bitcoin experiences actually increase the range for potential returns.
And despite all these extreme price shifts making news headlines, consider it free marketing for Bitcoin.
What people have to understand is that despite it being 10 years old, Bitcoin is still a relatively new asset.
And for new assets, volatility is inevitable.
As more people adopt and invest in it, the higher the price goes.
Volatility is just the side effect that comes with growth.
The thing about Bitcoin’s volatility is that you can see it as both a blessing and a curse.
But one thing is important: don’t panic—whether or not the price rises or falls dramatically.
If the price drops, make sure that you have a clear head before deciding whether or not you’re ready to let go of your investment.
If the price rises, don’t get too caught up in the excitement and cash your bitcoins out when you’re satisfied.
Despite its volatility, Bitcoin still has a lot of investors.
People value the investment opportunity,
they value what Bitcoin stands for as a decentralized currency,
most importantly, they value its real-life uses such as making payments, remittances, and even wealth preservation.
You know what they say right?
The beauty of Bitcoin’s volatility is in the eye of the bitcoin holder.
Okay maybe only I say that but it still applies!
What’s your take on Bitcoin’s volatility?
Let us know in the comments section down below!
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