Bitcoin's Price Keeps Falling
3 Reasons Why Bitcoin's Price Keeps Falling (And What You Can Do to Stop It)
In the world of cryptocurrency, nothing is ever as simple as it seems. While most people see the volatility of bitcoin’s price as a negative thing, there are actually some benefits to investing in something that is constantly fluctuating so much. As we all know, the value of any currency fluctuates frequently and significantly. The value of any given cryptocurrency can rise or fall by 20% or more in a single day, and even experienced investors struggle to understand why. Yes, it’s risky, but if you understand why bitcoin’s price keeps falling you can take measures to protect your investment and even profit from the dips. Here are 3 reasons why Bitcoin's price keeps falling, and what you can do about it...
Bitcoin’s Price Continues to Fall Because of Confusion
One of the most common reasons why bitcoin’s price keeps falling is confusion relating to how it is used. Especially in the early days of adoption, people were using the term “bitcoin” to refer to the technology itself, bitcoin mining, and bitcoin exchanges (where you can buy and sell bitcoin for fiat currency). By the time people had realized that “bitcoin” wasn’t one thing but three different things, bitcoin had already established a reputation for being confusing and complicated. Nowadays, people are much more aware of the difference between bitcoin the technology and bitcoin the currency, which has helped the reputation of bitcoin the currency.
Bitcoin’s Price Continues to Fall Because of Manipulation
Another reason why bitcoin’s price keeps falling is that there have been some high-profile accusations of market manipulation. While these accusations have yet to be proven in a court of law, they have fed into the narrative that bitcoin isn’t a legitimate investment. Any time that an investment is perceived to be “too good to be true,” people will assume there is foul play involved. And when you add in the fact that the cryptocurrency market is largely unregulated, it’s easy to see how bitcoin could be the victim of manipulation. In fact, there are signs that bitcoin’s price has been manipulated in the past, and there is no reason to assume that this isn’t occurring right now. If bitcoin’s price keeps falling due to manipulation, it would be very difficult to avoid losses. However, you can protect yourself from losses by putting a stop-loss order on your investment.
Bitcoin’s Price Continues to Fall Because of Limited Supply
Another reason why bitcoin’s price keeps falling is that the number of bitcoins that can ever exist is limited to 21 million. While this may seem like a strength of bitcoin, it actually makes the value of each bitcoin less predictable. When governments print more money or companies release more shares, the value of the currency or equity stays relatively constant. However, when the supply of bitcoin is limited, each increase in demand drives the price of bitcoin up significantly. When you combine a limited supply with high demand, the price of bitcoin can skyrocket. And when the price of bitcoin is skyrocketing upwards, it’s difficult to say when it will stop. This is one of the reasons why bitcoin’s price keeps falling: no one truly knows how high the price will go before it starts to drop.
Bitcoin’s Price Continues to Fall Because of Lack of Consumer Awareness
Another reason why bitcoin’s price keeps falling is a lack of consumer awareness. The cryptocurrency market is still relatively new and is largely unregulated, and many people are hesitant to invest in something they don’t understand. It’s important for bitcoin’s price to keep falling for this reason, as it will give people time to understand the technology and gain confidence in the investment. And even though bitcoin’s price has fallen significantly over the past few years, it has actually been relatively stable compared to other investments. The Dow Jones Industrial Average, for example, has experienced a roller coaster of a ride over the same time period. If you are new to the world of bitcoin, now is the perfect time to learn more about the investment and how it works.
Final Words: 3 Tips for Investing in Falling Markets
If you want to profit from falling markets, it’s best to diversify. Buy different types of assets (stocks, commodities, real estate, etc.) so that if one kind of asset drops, another might rise. However, you should keep in mind that this is a long-term strategy. Another great way to protect your investment from falling markets is to use stop-loss orders. If the price of your investment drops to a certain level, you can set a stop-loss order that will automatically sell the investment at that price. If you want to profit from a falling market, you can try short selling. This is when you borrow shares of an investment and sell them. Then, when the value of that investment drops, you buy those shares back at a lower price, return them to the person you borrowed them from, and keep the profit!