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11 February 2018, 08:16

Reasons for the Active Fluctuations of the Bitcoin

The recent rises and falls in the pricing of Bitcoin have caused a lot of troubles among people who invested money into this crypto currency. The fluctuations which are impacting the electronic currency are coming from various sources. The volatility index is an uncontrolled index that is influencing the growth of the virtual money. Most of the material money currencies has got a stable volatility index and are connected to other currencies as well.

In this aspect Bitcoin is at a very early stage of development. The price will still be both skyrocketing and falling not several times per month but several times per day while the operations are conducted through selling and purchasing. Here are the most impact bringing factors which change the Bitcoin rate exchange.

Level of Acceptance

The fundamental basis of any crypto currency is the amount of people who become its owners. This is a so called level of acceptance. It reflects the general popularity of the currency that constantly experiences strikes of various events like political issues, news, reports regarding the changes of the currency, Bitcoin policy changes etc.

The popularity of the crypto currency draws the governmental attention and that really disturbs the rating of the Bitcoin currency. Some news add negative shade as they state that a lot of black market operations are done via Bitcoin changes.

Dominating Market Players

There are people who can afford to concentrate a greater amount of the Bitcoins in their accounts. That automatically increases the growth of the price. Bitcoin is a small closed system and at current level of prices the number of potential owners of the crypto currency is slowly decreasing.

The main issue lies within this lowered opportunity of buying the currency and the fact that those who bought it cheaper can get more currency through trading as they have got more means to conduct the operations.

Unpredictability of the System

Bitcoin is the system that is capable to exist without being subordinate to any financial rule which refer to traditional currencies. The code that is used for the creation of the e-money makes it similar to gold. There are 21 units of bitcoins which can be endlessly divided into the smallest particles.

One cannot create more of it as it is done with paper money – the code prohibits it. The system of the Bitcoin is constantly changing and that is why it can grow in price or lose the value within minimal time extents.

People who are interested in the changes in the world of Bitcoin should understand that this is a totally different universe that does not rely upon standard economics rules and it will be really hard to predict the possible behaviour of the currency in the nearest future.

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