Why Is Bitcoin So Volatile? 📈 | Blum Academy

[Music] hi as a crypto World admirer you've probably asked yourself why does the market price of Bitcoin constantly fluctuate like a scale in the wind given bitcoin's volatility it's no surprise that it has become synonymous with the term roller coaster ride to better understand how this works Let's Take a Ride on it with Breeze Ready Steady go our way starts from 2011 and Bitcoin is on par with $1 now Jump Ahead 10 years to April 201 21 it's skyrocketed to $63,000 and just when you think it's Unstoppable June rolls around and the prize drops to

under $31,000 but wait by November it's back hitting $67,000 so June 2022 arrives and it crashes below $20,000 but Hold On Tight by March 2024 it SS again smashing records with a new high of around $70,000 so why is Bitcoin so stable well what many experts believe is the main factor behind this fluctuation is what we call supply and demand you see in the supply and demand Factor it all comes down to how many Bitcoins are in circulation and how much people are willing to pay for them there will always be just 21 million Bitcoins

nothing more so as the circulating Supply gets closer to that number prices are expected to rise and this is where things get intense this phenomenon creates a situation where major Financial players start competing for the remaining coins with fewer Bitcoins available any move they make can cause prices to spike or drop dramatically it's like a tug of war and bitcoin's price is caught in the middle another big factor that causes Bitcoin to fluctuate is the actions of investors it is common for example for large investors nicknamed whale investors to hold their Bitcoins for the long

term but don't worry conservationists they don't harm the whales in any way so when there are fewer Bitcoins available in circulation demand naturally increas es this prevents smaller investors from Gaining exposure their behavior can really shake things up and directly influence the fluctuation for example if they suddenly decided to sell their Bitcoins its price could drop rapidly and other investors could Panic therefore volatility is also linked to the steps taken by Wales the media is another Big Driver of volatility here's the Scoop news outlets often share predictions from so-called experts but guess what these predictions

are commonly personal opinions the real issue comes up when these experts predict the B bitcoin's value is about to sore or claim that new cryptocurrencies will rival Bitcoin this kind of news can cause bitcoin's price to swing wildly or collapse last but not least let's talk about how rumors about Bitcoin regulation can shake up its price in the short term did you know that what countries say about Bitcoin can cause its value to fluctuate some see it as a convertible virtual currency and a capital asset and require mining to be declared as income which naturally

causes its price to rise others however declare all cryptocurrency transactions illegal and crack down on mining leading to a price drop in practice this duality of Regulation from country to Country causes the currency to fluctuate curious isn't it now that you understand how Bitcoin fluctuations work what will be your next steps invest trade or simply watch the actions let us know in the comments section and before you go don't forget to subscribe to the channel so you don't miss any updates about the world of cryptocurrencies see you in the next video [Music]