Bitcoin has had its ups and downs and throughout the years it has changed how currencies are received and accepted. Bitcoin prices have experienced volatility since its inception up to what appears to be the end of its glory days. What’s happening with bitcoin and why is it falling so low?
The Glory Days of Bitcoin
Cryptocurrencies struggled a bit when initially introduced in the market, but it’s undeniable that its success is unprecedented. Who knew bitcoin could be such a hit? Unfortunately, it seems that the one hit wonder is experiencing some troubles as of late.
Some of the original cryptocurrency movers have seen downfalls in recent years. However, their current status in the market seems very questionable. Recently, bitcoin has been struggling and forecasters still believe the worst is yet to come.
Is There Still Worse to Come?
Compared to how people treated bitcoin during its rise, the people’s perceptions have changed today. The cryptocurrency market is experiencing severe price fluctuations, which is detrimental to bitcoin’s ability to function as a currency. Moreover, the current demand for bitcoin is relatively small, despite its fame. Digital currencies, compared with traditional stocks and assets, are significantly behind in both number of investors and capital.
Compared to traditional stock, bitcoin is now an underdog. It is a rather small market which makes it more vulnerable to price manipulations and changes in larger markets.
Low-Value Liquidity
Many analysts assert that the volatility can be attributed to bitcoin’s low liquidity. Low liquidity has the effect of frequent price fluctuations, making the market somewhat insecure and unpredictable. More cryptocurrency exchanges can address the problem and encourage a variety of investors to choose bitcoin.
One noticeable flaw in the whole cryptocurrency market is the lack of proper government regulations for cryptocurrencies. This lack of control brings fear to many potential investors, especially since they won’t have any recourse in the event of a mishap.
Failure to Recognize Market Interactions
Interactions with the market have changed. Bitcoin’s demise can perhaps be attributed to the fact that cryptocurrency is difficult to use as an actual form of payment. How then will consumers interact with its investors?
Current events play an important factor in all investment markets. It’s often a great indicator of whether bitcoin will be successful or not. The more positive the news is, the more encouraging it is for many investors to participate and buy bitcoin. People’s sentiments and perceptions about bitcoin can also have a huge influence on the market.
The glory days of bitcoin appears to be nearing its end. Optimists think the end is not so near though, thanks to the cryptocurrency regulations in other significant countries. Now maybe the cryptocurrency market just needs a little push to get it the ball rolling again.
