Reasons Why Bitcoin Price Is So Volatile?

If you are looking to invest in crypto currency especially in bitcoins then you have landed in the right place. You must have heard that bitcoin price prediction is quite volatile and in this post we are going to tell you about the multiple reasons why the value/price of this coin is so uncertain. Usually the volatility is measured with the help of a volatility index but instead of getting into the hefty calculations we would like you to know about the common reasons that affect the price of the coin.
Before we tell you about the multiple reasons we would like you to know that the price of bitcoin has historically been volatile so it is not something which is new. Below are the factors which would help you understand why:
Factors affecting the price of bitcoins!
Here are some of the general reasons why this currency’s value is so uncertain. Reading these reasons you would understand why you can't make bitcoin price prediction!
Bad news hurts its adoption rate
One of the common reasons why the bitcoin price goes down is bad news. The news events that directly affect the users and scare them would affect the adoption rate which in result affects the actual value of the coin in a negative way. In the same way positive news is going to affect the value of the coin in a positive way! There is a lot of bad talk and panic in this industry which makes the currency volatile.
The perceived value of the coin always sways
Another important reason why the value of the bitcoins is uncertain is because the perceived value of the coin keeps on swaying and fluctuating if you compare it with the fiat currency. This mainly happens because there are no such provisions and decisions by the governments which can support the value of the coin.
Uncertainty of future bitcoins value
This is also a very important reason for the uncertainty of the value of bitcoins. At the time of investing money in crypto you would certainly not know whether you are going to get a return on your investment or not. One should know that as the value of bitcoins is not static so there is always a possibility that you might not be able to recover your original investment.
Tax treatment on Bitcoins
In some states bitcoins price are known to be digital assets on which you have to pay a certain percentage of tax. This treatment of tax plays a mixed role on the crypto market. Some people think of this treatment as security to their investment and some take it as an unnecessary payment which increases liability. Because of this mixed impact the value of the bitcoins becomes volatile.

High profile losses in the past
Another important reason why bitcoins have a volatile value is because in the past people have suffered from a lot of huge losses. This puts a scarecrow for investors in this league. When the investment decreases, so does the business in the market which makes the price of the coin volatile. Negative news can affect the value of the coin beyond countries!