Bitcoin price is still volatile: Why the latest bitcoin prices are going down
It hasn’t exactly been smooth sailing for Bitcoin as of late. Just recently, Bitcoin, and crypto in general, has seen a continued dip in prices in the past few months. It now seems like it was years ago when crypto saw a massive boom, especially during the COVID-19 pandemic.
But why exactly are prices going down?
In this article, we’ll be looking at some of the possible reasons for the slow decline of arguably the most popular cryptocurrency in the world
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Now, let’s get back to exploring Bitcoin’s decline.
Why exactly has the most recognized cryptocurrency crashing all of a sudden?
Well, there are numerous reasons for the sharp decline. The first and most clear reason for the dropping prices is actually a sign of a bigger issue at large. Inflation is being felt all over the world and this has understandably affected the prices of Bitcoins and other cryptocurrencies as well.
As many countries are still trying to recover from the global COVID-19 pandemic, with varying degrees of success, it has not exactly been the rosiest of environments for economies to thrive.
Not only are cryptocurrencies dropping in value but the stock market has also started to go down with it, with the prices of consumer goods inversely rising as well. These trends have all sparked conversations about a possible global recession in the near future, which, of course, is not good for Bitcoin as a currency.
In addition to inflation, Bitcoin’s prices have also dropped due to rising interest rates in the United States. With the combination of these interest hikes and the worsening of inflation, Bitcoin’s volatility has been at a full display with prices dropping since November 2021.
Is this the end for Bitcoin as we all know it?
Definitely not.
While these external factors are no small issues in the grand scheme of things, the drop in Bitcoin prices only exhibits what we’ve always known about cryptocurrencies: they are volatile.
With this volatility, the drop in prices in a rather quick manner is not surprising given the reasons that we’ve just mentioned. However, with how quickly prices have dropped, there is also as much potential for prices to go back up.
For those who’ve been investing in crypto for a while, they’ll likely tell you that this volatility is not at all surprising. It just means that you have to wait out the volatility, allow for the crypto scene to stabilize, and see your investment grow once again.
Just as quickly as inflation has risen, we may see a more positive outlook in the next few months as countries slowly start to open up and economies regain their footing as we approach the tail end of the global pandemic. We’ve seen the start of many workers all across the globe returning to offices physically, COVID-19 vaccination at an all-time high, face mask mandates being gradually lifted, and COVID-19 cases slowly starting to drop. These signs of life in the current global climate are why Bitcoin will stand the test of time.
With prices dropping, there is a good likelihood that more people would give it a try at lower prices. At the same time, those who’ve been in the Bitcoin game for long enough will hold on to their crypto investments given that the world is slowly re-opening once again.
What is the lesson at the end of the day?
One is that investing in any cryptocurrency, even as big as Bitcoin, should be done cautiously and in a smart manner. Do your due diligence. Invest only what you can lose. Make sure that all your other financial needs and obligations are covered. As the volatility of Bitcoin has demonstrated, a lot can happen with the money you’ve invested and you should make sure that you won’t be left on the streets just because you put all your eggs in the proverbial crypto basket.
Lastly, it pays to do your research. As mentioned earlier, many seasoned Bitcoin investors are not at all surprised by the drop. Why? It’s because they know that cryptocurrencies are, by their nature, volatile. They’ve done their research and understand the way the currency works and that this volatile behavior is merely an ordinary Tuesday for the relatively young form of currency.
At the end of the day, there’s still a big chance for Bitcoin prices to regain their value. It’s likely and almost inevitable, just as how likely it was for their prices to drop. But it’s best, whether the prices are up or down, to make yourself a more informed investor. With you reading this article, we’re sure that you’re already on your way to handling the next Bitcoin boom or bust with the confidence of an experienced crypto veteran.
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Bitcoin price is still volatile: Why the latest bitcoin prices are going down
