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Why does the price of bitcoin fluctuate?

Why does the price of bitcoin fluctuate?

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Asked by H.Donna, Last updated: Jul 30, 2020

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P. Halah

P. Halah

Answered Oct 15, 2019

A lot of things can be attributed to this. First of all, bitcoin, just like other digital currencies, was created in a decentralized way such that it is not controlled by the entity. This means that the price of bitcoin depends mostly on the activities of the investors. One of the things that are causing the price of bitcoin to fluctuate is the increasing rate of bad news, records about bitcoin. When people start doing this, it increases doubt and fear in people. And as a result, investors will be very unwilling to invest.

The fear that bitcoin may be regulated by the government is another thing. Most investors think the involvement of the government will definitely affect their investment. Competition is also another factor. Aside from bitcoin, there are other cryptocurrencies like ethereum, peercoin, litecoin, etc. Any form of competition between will only lead to the reduction in the prices of some digital currencies, while others with great visibility will have their prices increased.

 

h. George

Government employee and a part-time content writer.

H. George, Copywriter, MA in English, California

Answered Feb 26, 2018

The International Organization for Standardization (ISO), which facilitates internaional trade in goods and services, does not yet recognize Bitcoin as a form of currency. Therefore, there is no accepted exchange rate. When Bitcoin was first created, the value of the cryptocurrency was set by the users. As Bitcoin gains acceptance and popularity around the world, more people are valuing the cryptocurrency as a legitimate form of payment for goods and services.

Currently there is no regulation or legislation concerning the use of Bitcoin. It is possible for hackers to steal bit coins and compromise their value. For these reason, Bitcoin is volatile and rates of exchange will continue to fluctuate until there is more regulation, oversight, and international recognition.

 

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