Bitcoin Has Raised from the Dead Many Times… Scary Volatility!
See also: El Bitcoin se levantó de la muerte muchas veces… ¡La volatilidad da miedo!
As the price of bitcoin continues to climb, it is becoming increasingly hard for people to ignore its popularity.
It’s an extremely widespread and well known cryptocurrency, characterized by its nature to quickly contraindicate predictions. In fact, Bitcoin has been declared dead many times by analysts and economists. Despite these claims, Bitcoin has shown signs of life numerous times after ‘death’, sometimes with shocking intensity — spooky.
Much like a Halloween character, this asset has been raised from the ‘death’ multiple times. While promising in terms of potential, what really makes the coin scary is its ability to quickly shift in value and scare investors regularly with seemingly unpredictable changes.
Anyone familiar with the industry knows that Bitcoin’s path has been anything but smooth since its creation on January 3, 2009. Bitcoin is a highly volatile asset class that has been derided by many naysayers. It has gone through several years of deterioration and stagnation, yet it continues to show indications of development.
There are many reasons why Bitcoin (and cryptocurrencies) may be declared dead or worthless by analysts who do not look at the full picture. Bitcoin ‘s volatility, instability and tendency to generate debates are all reasons why Bitcoin may be declared dead or worthless, but Bitcoin is also a powerful store of value. Bitcoin is still in the development stages.
However, Bitcoin is not without problems that need to be addressed. Volatility needs to be tamed with more stability if crypto-currencies are ever going to gain mainstream acceptance as an “investment” class. Advocates would say this volatility makes Bitcoin an ideal trading asset which many traders have already confirmed. However detractors will continue to cite Bitcoin’s volatility as a reason for why they believe it has no future.
Volatility is a natural aspect of the cryptocurrency market, and for a variety of reasons. The influence of news on the price of cryptocurrencies is also much greater than in other assets. Also, cryptocurrency markets have smaller liquidity than many conventional financial markets, allowing prices to fluctuate more quickly.
The mainstream media has always had a field day with Bitcoin. With its price volatility and decentralized architecture that prevents any single entity controlling it, Bitcoin is an inviting target for lurid headlines.
Similarly, when a cryptocurrency is banned in a nation or a well-known celebrity renounces support, interest typically drops and investors sell off rapidly. In addition, the stock market has an unfair edge in volatility because it has rules that help to dampen huge price changes. So-called circuit breakers put trading on a stock or ETF on hold for a set length of time if it rises or falls too quickly.
For now, at least, Bitcoin is not dead. Many people remain unconcerned with Bitcoin’s death, mainly because it would have to collapse below $0 or cease being traded altogether for it to be truly useless. As this is highly unlikely given the circumstances, it seems as if this cryptocurrency will remain one which simply continues to scare.
