Crypto assets are funds backed by blockchain, existing only in a digital space and protected by encryption algorithms. The cryptocurrency market has no central authority to govern it – governments do not control prices in this market, and central banks have nothing to do with crypto supply. It is the reason why this market is increasingly volatile, and it is impossible to control price rises and drops.
LIFESTYLE: WHAT IS CRYPTO AND WHY DOES ITS PRICE CHANGE
What is Cryptocurrency Used for?
Digital money may have the same use cases as traditional currencies, but they have yet to be widely adopted. For example, today, only some companies and shops add crypto payment options for clients.
Another use case for crypto is cross-border money transfers, which are done in a matter of minutes and at low commissions. Indeed, you can send crypto wherever you wish; it will be delivered to the recipient immediately. It contrasts with the way people send traditional currencies through banks at high fees and with many intermediaries.
The main application for digital assets is investment and trading due to the high volatility of crypto assets.
Bitcoin is the first crypto coin and the market leader, driving the whole cryptocurrency market. What about BTC volatility? Let’s talk about it.
The Volatility of BTC
Here are some factors affecting the BTC rate:
- User sentiment
- Balance between supply and demand
- Media coverage.
Altogether, these factors create price fluctuations. The BTC rate is based on investors’ speculations on future price rises or drops, so the rate may change rapidly and show significant increase or drops even in 24 hours.
In 2022, the high level of inflation stopped people from investing, which is another reason why the crypt0 market is in a downtrend. Add the war in Ukraine and increased interest rates, and we get the full set of the bear tendency. However, the downtrend is a good chance for people to buy Bitcoin as its price is much lower than it used to perform before.
Where to Buy Cryptocurrency?
There’s no doubt that the BTC rate will grow and start a new bull trend. So if you buy crypto today and hold it long term, you have good prospects of enrichment in the future. Use reliable and official crypto platforms to be confident that your investments are protected. For example, WhiteBIT is a good option with an intuitive interface and a high level of safety. Read more about this exchange on its official website and blog.