Is Bitcoin highly profitable with high volatility? Well, for the short-term market, the answer is YES, while it might be difficult for the long-term.
The rise of Bitcoin investment is evident. In the year 2018, the price of bitcoin was around $6,000 to $9,000. The swings come out from day or night, and the value as of now is $43,789.10.
So, you can see bitcoin is highly volatile. However, there are no specific answers, but few can help to determine its profits. Thus, let’s examine the important aspects that need to be judged to check why bitcoin is so volatile.
Important Points to Note About Cryptocurrencies
One of the key concerns surrounding cryptocurrency is its volatility. While checking the year 2020, Bitcoin was trading at $20,000, and in year January, it crossed the value of $40,000. The value was continuously rising and reached $65,000 by April.
However, its price has fallen and come to nearly $43,789 by the year 2022. Similarly, the crypto token has seen volatility in the cryptocurrency market in which some completely fall away while some are surviving. Thus, the most important question occurring in investors’ minds is- Does Bitcoin is profitable or not?
With such a case, it is recommended to check a few factors that need to be determined. So, read on.
Cryptocurrency is an Emerging Market
It is still an emerging market that is gaining massive popularity as well. Thus, it is giving a boost in investors to invest and make profits even with high volatility.
With so much media influence, this market is still miniature compared to traditional currencies like gold. It means that smaller forces or even holding a smaller group of cryptocurrencies can influence the whole market.
Cryptocurrency is Speculation
Similar to stock market, the cryptocurrency market is driven by speculations. Thus, investors can bet on the prices when they go up or down to make their profits. With this high speculation power, one can influence the whole market, and it causes high volatility.
Cryptocurrency is a Pure Digital Asset
Many cryptocurrencies such as Bitcoin and Ethereum are purely digital assets that do not include physical currency or government bodies backing. The rule of demand and supply governs cryptocurrency’s value. However, the absence of stabilizing factors such as the government increases the fluctuation in the demand and supply of currency.
Cryptocurrency is a Developing Technology
It has been from decades since the Bitcoin idea was introduced. With blockchain technology, crypto tokens are still evolving. There is a stability and scalability problem where the smart contract is not validated with the expected timeframe. This creates a sudden downfall.
Friable Investors
The cryptocurrency market does need to be expertise. So, mostly part-time workers are investors, just adding a small portion of their income. They invest just in the hope of making profits and faster withdrawals. However, frequent withdrawals also lead to volatility.
Should You Invest in Bitcoin?
Several factors like high volatility make cryptocurrency unsafe. But we cannot ignore the truth that high volatility helps us make good profits. However, if you love to take the risk and know-how to invest, you are making the right choice. The link users suggested investing in cryptocurrency especially, Bitcoin and Ethereum.
These are widely-known cryptocurrencies that benefit you from the network effect. More people want to invest in BTC because it has many holders that assist people in investing in safety. Besides, Bitcoin investors believe that it will be a successful long-term investment since the supply is fixed, unlike other currencies like the yen.
Those who invest in BTC believe that Bitcoin is extensively used as digital cash, and soon it will become a global currency, as it has holders from worldwide.
If cryptocurrency seems too risky, then you can consider the help of an expert that helps you make good profits. You can buy crypto coins from Coinbase for trading. Also, these companies are known to provide stable profits to their investors.
The Bottom Line
Cryptocurrency is a high volatile market because of many factors. However, it is still profitable since it has no control over the government and several other features like transparency, anonymity, and greater return.
It is a free currency that goes up and down every day. Unlike the stock market, cryptocurrency is a big investment pool that comes with profits. However, while investing, it is recommended to check current market trends.
