Bitcoin is the leading cryptocurrency of the world in terms of market capitalization. It rose on the scene after the global economic recession of 2008. After the recession, people started to look out for alternatives to the traditional fiat currencies. Although bitcoin has gained a lot of prominence and attention from the financial community in the recent years, it has a lot of serious issues associated with it that hurt its reputation, and one of these issues is volatility.
Last year, the bull run that was shown by the asset took everyone by shock. Bitcoin rose from a price of around $1,000 to almost $20,000 in just a matter of 12 months. Last year in December, bitcoin was enjoying these peaks. But as we stepped into this year, major drops were seen in the price of bitcoin. At the time writing, bitcoin is looming around at a price of $3,627 as per www.coinmarketcap.com. This is one of the major issues linked with this asset. One day it is seen going up and the very next day, it is down in the dust.
Volatility is one of the big reasons why an exchange-traded fund (ETF) is not getting approved by the regulatory body in charge, the United States Securities and Exchange Commission (SEC). The worth and credibility of the asset in the eyes of the general public and the investor community are also put into question as this kind of behavior is shown by the asset.
Also, this issue is one of the reasons why people hold back from using bitcoin as a source of making payments. As the price can change in a matter of hours, it becomes almost natural to not use it as a source for making payments. If this asset is to gain large-scale acceptance in the general public as a currency, this issue needs to be tackled as soon as possible.
Right now, the entire crypto market is in a severe bear run that has been going on for months. Many different crypto projects have been struggling to manage their finances owing to this drop. Developers and employees are being laid off by the projects. Things are surely looking to be bleak for the market right now. Let’s see if the market recovers from here on, or the chaos is just beginning.