At press time, currencies like bitcoin are trading for $12,500. This is about $700 higher than where it stood yesterday, suggesting the currency is already back on track to reaching new heights this year.
Bitcoin Is Doing Well, but It’s Still Vulnerable
Bitcoin has been on a steady rise since April of 2019 when it hit $5,000. Yesterday, Live Bitcoin News published an article that suggested many sources and charts believed the currency would continue to rise over the next five to six months at the minimum. So far, those predictions seem to be coming true, as all bitcoin needs to do is rise another $1,000 before it once again strikes the highest mark it’s set this year.
While this is certainly good news, it cannot be denied that cryptocurrencies like bitcoin still suffer from volatility. After all, the currency dropped by roughly $3,000 about two weeks ago and required a bit of time to get back to where it was. This can be said for most cryptocurrencies. Ethereum, for example, is trading in the high $200 range, whereas before it was in the mid-$300s.
So, while 2019 is potentially proving to be the year for crypto, price swings are still a little more common than we’d like. However, some sources claim that this isn’t necessarily a bad thing – that there are positive sides to volatility that investors can potentially gain from.
One is that volatility consistently leaves the door open to further price boosts. This is the trouble with fiat and stable coins, which tend to remain constant. There’s no chance of potential gains given that they are “locked in” with currencies that serve as traditional forms of national money. The U.S. dollar, the yen, the euro and other forms of fiat are not immune to problems.
The U.S. dollar has had trouble with inflation in the past, while other entities like the bolivar, the national currency of Venezuela, has virtually lost all its value thanks to ongoing inflation, but for the most part, fiat is designed to remain steady in times of trouble.
Volatility Can Actually Lead to Greater Wealth
Crypto, on the other hand, is being utilized more for speculative purposes. It is being looked at more as an investment tool; a way to build one’s wealth and net worth. Thus, volatility can serve a strange purpose in these situations. Volatility keeps these currencies speculative, meaning people can continue to invest in them and potentially gain greater wealth down the line.
Unfortunately, many regulators and skeptics alike view volatility as a strictly negative aspect, and label cryptocurrencies as unfit investments or unsuitable for retail players. Yes, it’s true that crypto does stand to lose everything, but granted it moves in the opposite direction, those involved can earn more than they ever thought possible.
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