Bitcoins first emerged on the world stage in 2009, but at that time, the currency received little attention, with its value amounting to only a fraction of a dollar ($0.09). However, since then, the value of Bitcoin has skyrocketed beyond what anyone could have imagined, with price fluctuations that can be difficult to understand or predict. While there are certainly risks and lows associated with this form of investment, there are also moments of extreme high value that can be difficult to fathom. know more about tesler software by clicking here.
The History Of Bitcoin
Bitcoin was the first digital coin that burst into the financial scenario in 2009. It was a retaliation against the great financial depression that engulfed the world in 2008. Later in the year, the Bitcoin white paper was released wherein the underlying technology of the paper was described. But its start was a quiet one. It even came in very quietly without any sound as there were no takers for it.
Although it crept in quietly, it grew silently under the ground. The initial few takers saw huge potential in this form of currency and they began investing in them. Gradually, very gradually the currency began growing and it grew in leaps and bounds then. The burst in growth was perceived when big names adorning the industry took interest in them. From then on there has been no looking back for the currency despite it being a highly volatile asset class.
Is Bitcoin A Stable Form Of Investment?
Bitcoin is one of those asset classes that have made its mark on the financial scenario. It is a good investment where the ROI is worthwhile. The astonishing returns on investment that Bitcoin has provided would certainly capture the attention of any investor or trader, even if they have not yet invested in it. However, it’s important to recognize that despite its impressive returns, Bitcoin remains a highly volatile and risky investment. Ultimately, the decision of whether or not to invest in this currency is one that should be made with careful consideration, taking into account one’s personal financial situation and risk tolerance. Whether you invest you are still at risk of losing at some point and if you do not invest then also you lose out on the potential good. The ultimate truth is Bitcoin is a good form of investment provided you can digest the losses when you are in the face of it.
Reasons For The Volatility Of Bitcoins
Everyone by now knows that Bitcoins are a highly volatile asset. Its volatility arises from numerous reasons. The volatility that it has is very closely guarded by its high rate of return. The potential returns that one can squeeze out of each coin hide the fact that they are a highly volatile asset class. But still
- The demand-supply gap influences the fluctuations in its price the most. While it is true that the coins will never exceed 21 million under any circumstance, it is also true that they are always in demand. As soon as there is a crunch in the market the prices shoot up. Its price is affected by the number of coins in circulation in the market and how much the consumers are willing to part for it. But it is wise to remember that as the 21 million mark reaches the prices will skyrocket beyond imagination. It also gains its volatility from the inability to predict the coins and their supply.
- Investors are also largely responsible for their price fluctuations. Most investors who have a huge number of coins tend to hold onto them for a longer period and overshadow the small fry roaming in the markets. This tendency of holding onto many coins also makes the prices fluctuate. It also depends on how and when they will liquidate their assets. If these Bitcoin eventually decide to get rid of their coins their market value will depreciate.
- The media is a powerful medium as you know. It can make or break any person or commodity. As soon as any news about the coins is over the media there is either a rush to buy the coins or sell them off. This gives rise to a lot of volatility.
- There are rumors regarding the regulation of Bitcoins. This leads to some amount of apprehension in the users and the prices tend to fluctuate accordingly.
- A commodity that is still in its infancy is also prone to fluctuations because of the uncertainties that surround it. A commodity only more than a decade old is considered to be in its bidding stage. So you cannot rely too much on it.
But still, among all the cryptocurrencies found in the market, Bitcoin is considered to be the safest. And it becomes all the safer when you trade in them from platforms like Immediate Edge.