The past few years have seen an unprecedented level of volatility in the cryptocurrency market. From its early days as a fringe digital currency to its meteoric rise in value, Bitcoin has been at the center of this movement. In this blog post, we will look into the rise and fall of Bitcoin and examine what contributed to its recent market crash.
Bitcoin is a decentralized form of digital currency created in 2009 by an anonymous group of developers known as Satoshi Nakamoto. It operates on a peer-to-peer network, meaning it does not rely on any central authority for its management or transactions. Unlike fiat currencies such as the US dollar or euro, Bitcoin is “mined” by computers which must solve complex mathematical problems in order to obtain coins. This makes it different from most other forms of money, since unlike traditional currencies it is not backed by any national government or reserve bank.
Since its inception, Bitcoin’s price has been highly volatile and prone to sharp rises and falls in value. In late 2017, Bitcoin experienced a tremendous surge in price, eventually reaching an all-time high of nearly $20,000 per coin before crashing back down below $4,000 just over a year later. This extreme fluctuation led many investors to question the future prospects for cryptocurrencies and caused some to abandon their holdings altogether.
What causes the volatility of the cryptocurrency market?
Most experts agree that there are several factors contributing to the cryptocurrency market’s volatility. The biggest issue is that there are no regulations governing these markets which can lead to wild swings in prices based on rumors and speculation alone. Additionally, large investors have been known to manipulate markets through techniques such as spoofing (placing orders with no intention of having them filled) and wash trading (simultaneously buying and selling assets). Finally, news reports about scandals involving cryptocurrencies can cause investors’ sentiments towards them to drop dramatically overnight.
The rise of Bitcoin and its value
Since its creation in 2009, Bitcoin has experienced many highs and lows when it comes to its value. Its first big spike came around 2013 when it began trading above $1000 per coin for extended periods of time after largely being regarded as useless up until then – this was followed by another slump soon after as public interest quickly dissipated again. However, late 2016 saw things take off once more as news outlets began spreading positive stories about blockchain technology (the underlying technology behind cryptocurrencies). This sparked renewed interest which ultimately culminated with the incredible bitcoin rally heading into 2018 which saw prices reach almost $20k per coin before eventually crashing back down soon afterwards due to widespread panic selling amongst investors concerned with their bitcoin profit evaporating overnight.
The fall of Bitcoin and its value
The great bull run at the end of 2017 ended abruptly when bitcoin peaked near $20k – almost double what it had been worth just months prior – only for prices plummeting back below $7k roughly two weeks later wiping out billions in investor wealth along with it while also ushering in another bearish winter lasting over a year where values went from briefly flirting with highs above 10k all way back below 4k again around mid 2019 with seemingly no bottoming out point yet within sight – though some analysts argue that bitcoin could be bottoming out now after remaining relatively stable between 3200$-3600$ for long enough periods without seeing significant corrections lower than that even during times when equities markets were crashing hard earlier this year – something which would appear indicative that despite further losses being likely one should not expect values lower than 3000$ if/when that happens .
The cryptocurrency market has proven itself highly unpredictable with sudden spikes followed by equally sudden drops only months apart causing concern amongst both novice investors looking to make quick gains but also seasoned traders who failed to anticipate drastic corrections taking place so rapidly leaving them nursing huge losses despite going into positions expecting far more moderate ones instead – but those willing able&ready to ride out these turbulent waters still do stand good chances at reaping bigger rewards should they manage / prepare well enough beforehand & stay disciplined throughout whole timespan needed until conditions finally recover sufficiently & show clear signs that next bullrun may now be under way .