The value of bitcoin has been fluctuating for a while now, and the current debate is whether the fluctuations are normal or worrisome. Some argue that bitcoin’s volatility is proof that it has no future as a mainstream currency. Others argue that its volatility is proof that it will become a mainstream currency one day. In this article, I argue that bitcoin’s volatility is a sign that it’s successful as a mainstream currency, and it’s a sign that it’s still a very young technology.
Bitcoin has been the talk of the financial world for over a year now. The cryptocurrency has been gaining traction among those looking for an alternative to traditional banking and investing or visit the official site here. Practically, the Bitcoin era has been used as a form of digital currency or a payment method. Still, its real value comes from the decentralized community that has formed around it.
Is it okay if the bitcoin value fluctuates?
It is no secret that investors are constantly on the lookout for the next big thing that could make them rich. Cryptocurrency is one of those trends that has captured a lot of people’s attention recently. Bitcoin is often described as a “currency,” but this is inaccurate. It is a way of exchange. Whether it is called a currency or not, there is no doubt that the future of Bitcoin is very bright. When it comes to tracking the value of the Bitcoin era, however, it is important to understand that bitcoin is not the only store of value that is capable of appreciating in value.
A pure gold standard would have been a great reference point. In the early 20th century, many countries opt for gold standard when it comes to their currency. According to a gold standard, a dollar is a dollar—no matter what the price is. When gold was backed by dollar, it meant it held a fixed amount of gold. Therefore, if the dollar is worth more or less than a dollar is worth, either the dollar’s value is changing, or the price of gold is changing. In this system, the two would be in balance.
People have recently experienced the ups and downs of bitcoin. This is not surprising since the currency has gone through a significant rise and fall over the past few years. However, the spectacular rise in value has seriously encouraged many people to look at this new currency. It was a good day for Bitcoin, as bitcoin hit new all-time highs of $3,279 on Friday. This marked the second time in a week that the cryptocurrency’s value has topped $3,000, and it comes as the cryptocurrency is riding high on a wave of optimism. It is notable for the time that the global value of all bitcoins in circulation topped 100bn for the first time, and it is also the first time in over four years that the currency has hit a new all-time high.
When Bitcoin was first introduced in 2009 by Satoshi Nakamoto, it was designed to be a completely decentralized currency, which means it would have no central authority or government regulating its monetary policy. This poses a few problems for the Bitcoin era, the most prominent being the volatility of its value. Bitcoin’s value has been highly volatile over the years, ranging from the thousands to the millions of USD, with huge swings in between. The main reason behind this volatility is the lack of reliable information regarding the Bitcoin economy, leading to an increase in investors’ risk, which has led to slow growth for Bitcoin’s value.