After dropping below the $4,000 mark, bitcoin has bounced back and is currently standing around $4,023 (as per www.coinmarketcap.com) at the time of writing. Here are the statistics for the top 7 cryptos listed on CoinMarketCap right now.
Bitcoin is the largest dominator in the crypto arena with the highest market capitalization. Most of the time if it moves in a certain direction, it also takes the smaller currencies along with it. Right now, most of the top currencies on CoinMarketCap are showing major greens along with the leader BTC.
After showing much stability in the past month, bitcoin saw major drops this month coming down from the $6,000 range into the $3000s. This drop resulted in major losses for many investors who were involved in the game. But this kind of volatility shown by bitcoin is not new. Since the eruption of this asset, this characteristic has marred its reputation majorly.
Price of bitcoin fluctuates very often and it is one of the reasons why the trust of the general public and institutions is low regarding this space. The price is seen going up one day at a rapid rate and the very next day, the asset is down on its knees resulting in major losses for the traders.
Volatility is one of the reasons why an exchange-traded fund (ETF) has not been approved by the regulatory body in charge, the United States Securities and Exchange Commission (SEC). Owing to such sudden price drops and spikes, people also usually refrain from using bitcoin as a currency. Instead, people try using bitcoin as a source of gaining profit in fiat. Bitcoin provides a global framework of operation and not using it as a currency kind of goes against its essence.
If this asset is to grow and mature, it has to tackle this issue of volatility that is associated with it so that a general sense of trust is established among the general public regarding it. In order to provide people with stable cryptos, stablecoins are also springing up on the scene. But then again, they introduce the issue of a third party getting involved in the financial framework.
With the whole crypto world in a frenzy over these price drops related to bitcoin, it will be interesting to see if this asset is able to maintain its upward spike for long.