All the things you wanted to know about Bitcoin and the other cryptocurrencies

Is Volatile The New Stable For Bitcoin?


In case you haven’t noticed, the price of Bitcoin has jumped around quite a lot recently. It’s been at six-month highs and lows within the past two weeks alone, and it’s worlds away from the price it was trading at back at the start of 2019. With barely two weeks left to go, we can’t even say with any confidence that we know what kind of value it will be trading at when we move into 2020. If you’re the adventurous sort, trading in Bitcoin has probably never been more exciting. If you’re the kind of investor who prefers stability or predictability, though, the past one or two months have probably had your heart racing.

You see the word ‘volatility’ mentioned a lot in the world of gambling. It’s one of the factors that go into what makes a good slots game on website like An online slots game with low volatility can be relied upon to consistently pay out in winnings a certain percentage of what’s paid into it as takings. An online slots game with high volatility is far less dependable. It might pay you out its top prize on your very first spin. It might pay you out nothing at all, ever. Volatility in an online slots game can be exciting. In a currency, it can be frustrating at best, and dangerous at worst.

If you’re the sort of trader or investor that would prefer Bitcoin not to be quite as volatile as it currently is, we’re afraid we have bad news for you. Several ‘in the known’ crypto experts have been looking into the reasons behind the unusually high levels of volatility within the currency, and they’ve all reached the same conclusion. This isn’t a temporary period of instability. The constant variations in value could very well be here to stay. For Bitcoin – and perhaps for other cryptocurrencies, too – volatile might be the new normal.

While there has always been an element of instability about Bitcoin in the past, growth has always been relatively predictable. Values have gone up and down, but the general trend of the currency has been to increase in value even if it dips sharply for a few days or weeks. Only a volatile currency could start the decade worth less than a dollar and end it worth several thousand, but it’s easier to sell both the currency and the general idea of crypto to people when you can point to a chart that shows almost constant growth. When that picture changes, it only serves to reinforce the stereotype that people have in their heads about crypto – it’s not a real currency, it’s not to be trusted, and it can’t take the place of coins and cash. We all know that to be untrue, but we’re dealing with a system full of people who believe otherwise.

Just because the hyper-volatility may be here to stay, though, doesn’t mean that there aren’t even better times ahead. Bitcoin is still in its infancy – barely a decade old – and it might be that we’re still yet to see its established, reliable pattern and behavior. The whole concept of cryptocurrency is still growing around it. Rival cryptos appear every week, many of which would love to replace Bitcoin as the world’s number one cryptocurrency. Facebook has tried to get on board with its own cryptocurrency, although it’s Libra project looks to be doomed. The attempted birth of Libra caused American regulators to look more closely at what a cryptocurrency actually is, and whether it threatens the established financial order. Now, they might be considering new regulations to deal with the perceived threat. Every time something like this happens, the value of the currency is affected. It’s impossible for it not to be, and it would happen to any currency – crypto or ‘real’ – in the same circumstances. It just happens to Bitcoin more often because every problem it comes up against is a ‘first.’

With that in mind, we should probably all get used to the idea of not panicking when the value of Bitcoin suddenly nosedives. We don’t need to run to the forums. We don’t need to sell our coins, and we don’t need to buy more of an alternative form of crypto just to cover ourselves in case the whole thing spontaneously collapses in on itself. In the majority of cases, the price will have taken a dive in response to something that’s going on elsewhere, and it will recover again as soon as that ‘something’ has been figured out. Bitcoin may deal with obstacles more often than any other currency, but it’s also shown itself to be resilient. It might take longer with some problems than others, but it always rights itself in the end. Perhaps more importantly, there are enough very wealthy investors involved in it to ensure that it steers clear of disaster. The headlines might have been more panicky than ever before recently, but that doesn’t mean that the behavior of Bitcoin owners and dealers should be affected by them.

Bitcoin may never achieve the value of half a million dollars for each individual coin that some people were predicting for it three years ago. It may never even reach half of that. Perhaps it shouldn’t. Maybe that kind of value would only distort the market and make Bitcoin inaccessible to ordinary people. That would be totally against the principles it was invented for. Bitcoin was created during the global financial crisis of 2008 and 2009 to be an accessible currency that was independent of major banks, and could, therefore, survive a similar crash happening in the future. If it were to become so rich that normal people couldn’t afford to access it or trade in it, it would have failed in its objective. Some would argue that even now, it’s too valuable to be useful to the average person. Going further, some would even argue that a price drop wouldn’t necessarily be the worst thing for it in the short term if it meant more people could come on board and buy into it.

Nobody knows where Bitcoin will be twelve months from now, and anyone who claims otherwise is lying. The only thing for certain about this cryptocurrency is that nothing’s for certain. What we do know, though, is that the next year looks set to be a wild, bumpy ride. Make sure you’ve fastened your seatbelt.

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