Why bitcoin price is so volatile?

bitcoin transactions

Bitcoin is the most famous cryptocurrencies that has good popularity among normal people. When you are a bitcoin user, you would have known that the value of bitcoins is volatile in nature. But you would be unaware of what makes volatility in bitcoins. There are so many benefits that you can obtain when you acquire bitcoins and these advantages had created more interest on it for individuals.

When you are thinking to get bitcoins, there are so many ways like mining them, getting in exchange of other cryptocurrencies and normal money and more. Obtaining bitcoin bonus is also one of the methods that help you to get this kind of digital money. This article will help you in knowing the actual fact that causes volatility in bitcoin. There are so many factors that influence the bitcoin price and following are a few of them.

  • Market size – It is a fact that the market size of bitcoins as well as other digital money is relatively small when compared to any other forms like stocks and others. Because of its small market size, it exacerbates the effect of any other factors that affect volatility.
  • Liquidity – Liquidity is nothing but how readily the currency can be exchanged or traded. In order to have more liquidity, there should be more buyers and sellers. Having low liquidity instead of higher ones may increase price fluctuations.
  • Regulation – It is another thing that contributes to the volatility of the cryptocurrency bitcoins. There are several countries that support this digital money but still some are opposing it. So, its regulation has a good impact in its value fluctuation.
  • News – One of the great things that influence the price of bitcoins is the news based on that cryptocurrency. When the news events regarding bitcoins is good and positive, it makes more people to buy them as well as its price may get higher.