Crypto observer Bharat Bhise agrees that
one popular opinion about cryptocurrencies is its volatility.
This is true for
most digital coins, especially one of the most popular ones, Bitcoin. However,
most beginners and even detractors tend to think that being “volatile” is a
negative thing. However, experts say that it is a part of Bitcoin’s popularity
since, with the risk, comes higher chances for rewards through upward trends.
Why are Bitcoin and other cryptos considered
to be volatile, and why should first-time traders need to be familiar with the
intricacies of this cryptocurrency detail?
In terms of the digital coin industry,
volatility is the aggressive movement of prices for currencies. For example,
Bitcoin is considered to be highly volatile because, at its peak, exchange
rates ranged from $700 to upwards of $20,000. According to Bharat Bhise,
experts say that these peak ranges are what attracted investors and traders.
Why do Bitcoin and other cryptos enjoy high-risk,
high-return reputations? Some are saying that since the digital currency market
is still fairly new, there are still some who remain wary and continue to
speculate, which in turn fuels the up-and-down trends currently seen in
Bitcoin. Meanwhile, adding to the fact that blockchain technologies used in
cryptos do not have legal tender, liquidity is also an issue. Bitcoin and other
digital coins also remain unregulated, despite efforts by industries to put
control over them. This means that unlike traditional investments and trading,
Bitcoin and other digital wallets can be manipulated to an extent. Other
factors also add to the already volatile market, so much that Bitcoin has
enjoyed as much as 27,000% rate of return.
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