Stability of the Cryptocurrency Market
The cryptocurrency market can be incredibly lucrative, yet incredibly volatile. Bitcoin, for example, reached a peak price of almost $20,000 for one Bitcoin in December 2017. However, today that price has dropped to about the $6,000. This change is certainly drastic, but it’s not an indicator that cryptocurrency is dying. Not only is there always going to be volatility in a new market, but these prices change all of the time due to a number of factors, from government regulations to institutional investments. The cryptocurrency market has a lot of factors that contribute to this pricing which are worth acknowledging before investing.
Volatility of the Cryptocurrency Market
There are several factors that make the cryptocurrency market constantly change. Here are just a few to consider:
Pricing of Cryptocurrency
Cryptocurrencies are priced with what’s called “price discovery”, and it naturally values cryptocurrencies at any given moment based on the the trading happening. For example, on the cryptocurrency exchange GDAX, which is where professional traders and institutions can trade Bitcoin, the price of the last exchange is the price of the cryptocurrency at any given time. Therefore, the price varies as the trades occur and are slightly different, and thus it is always changing.
Investors React to Source Code Discoveries
Bitcoin and other cryptocurrencies make their source code free to the public, and people who review the code will voice their opinions on it. They’re free to suggest changes and upgrades to further protect users privacy and security. This is how the cryptocurrency market can make improvements to further tighten up the source code and prevent any security threats.The price of the cryptocurrency will reflect the general confidence of the marketplace, and as improvements are made, the price increases.
Increased Government Regulation
Governments are increasing their involvement in the cryptocurrency market as it evolves. The U.S. government is continuing to increase regulation as more people turn their interest to it. The more regulations the government implements, the more trust is growing in the cryptocurrency market. Some recent examples include the IRS’ new treatment of cryptocurrency as a taxable asset and SEC regulations on certain initial coin offerings (ICOs).
Outlook of the Cryptocurrency Market
Although the outlook of the cryptocurrency market is constantly evolving, it is on track to grow as more people gain access to investment opportunities and there are new regulations put into place. We are certain that more people will be able to invest in the market as more methods of obtaining cryptocurrencies ,such as Pelicoin Cryptocurrency ATMs, become more commonplace. The more cryptocurrency transactions take place, the more fluctuations from those transactions will be seen in the cryptocurrency market. Overall, this is an exciting time for cryptocurrency as the market continues to adapt to changes and expand.
Get Started in Cryptocurrency With a Pelicoin ATM
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