Cryptocurrency is a lucrative investment platform for millions of traders. However, the market is not the same as the stock trading market, although there are definitely many similarities. Bitcoin has been the dominant crypto in the exchange. There are various reasons behind the spot rate fluctuation of Bitcoin.
But before investing in the cryptocurrency, you should gather some knowledge about its volatility, which is now measurable using the volatility index. Various tools are also available in the market nowadays to measure the volatility of Bitcoin. The aim is to track the possible implied volatility of the crypto over the next 30 days. As, by market cap, Bitcoin is the leading digital currency, volatility is crucial.
Alarming news affect the rate of adoption
Recently, you must have noticed a sudden fluctuation in the price of Bitcoin that is scaring off the traders. It is because of the issues like
- Probability of Government regulations
- Geopolitical events
- Moves by prominent companies and individuals.
For instance, a few days back, tweets from the CEO of Tesla Inc. suggested that the company is no longer going to accept cryptocurrency as a mode of payment for the vehicles. As a result, there was a massive sell-off, and the price plunged to an all-time low. Of course, the volatility can be scary, but who cares?
The market is open for the profit
When it comes to understanding volatility, nothing comes ahead of Bitcoin as it was the first cryptocurrency that came up for trading. The years 2018 and 2019 have been the phase of “crypto winter”. Imagine the condition of the traders counting the values every day to ascertain the possible profit value. Those who made it through the high-tension phase made an incredible bank balance in 2020 and 2021.
- In early January 2021, the valuation of this global cryptocurrency reached $ 1 trillion!
- Analysis in mid-March 2021 showed that the volume doubled up in a few months.
You just need to focus on the trigger factors that cause an impact on Bitcoin’s valuation as well as the valuation of the other cryptos.
Trust the public acceptance
Nobody embraced Bitcoin from Day 1 as the most profit-making tool in 2009 when Satoshi Nakamoto launched the cryptocurrency. But with the passing years, people saw the change in volume of trade and the price surge with their own eyes. People became millionaires within years, and the public started to accept and cheer for Bitcoin.
Instead of trading in fear due to the high volatility, you should concentrate on its profitability. Using a good app like yuan-pay-group will help you to maintain the stats without the input of much time or money. Acceptance from the investors and miners as well as the different financial entities has encouraged the profit ratio of the crypto.
Impact of limited supply
Any cryptocurrency, including Bitcoin, exists in a finite supply. Hence, as time passes, more people will accumulate cryptocurrencies, and miners will be hunting for the increasingly decreasing number of bitcoins. The halving process will set in periodically when Bitcoin facilitates growth and reduces then inflation.
- This will double the number of the bitcoins that are remaining for mining.
- The value of each Bitcoin will be decreased by it.
And the event can happen in about every 4 years. So, if you have 2 in your wallet now, it can be 4. Therefore, be wise and keep a tab on the next halving.
Bitcoin mining demands enormous energy consumption; whether using a single rig or as part of a colossal crypto firm. Do you know that it is easy to gauge the growth of the industry by calculating its overall energy impact? The energy consumption is equivalent to Argentina’s annual carbon footprint! Hence, it starts a dramatic shift in the trend as many companies and firms begin to make crucial decisions to save the planet’s non-renewable energy resources.
However, the above fact also shows that there are more miners in the industry than ever with more cryptocurrency mining rigs too. As such, energy consumption has not caused any significant decline or increase in the cost relative to the total volume of transactions since 2010, you can depend on the volatile crypto.
But gathering information and updates on the industry and being proactive are the two critical actions that will help you to maximize the profit.
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