The volatility of the cryptocurrency market cannot be underestimated. In mid-February 2021, the price of Bitcoin surge to an all-time high and it was then expected that it would hit the US$60,000 mark. And then the unexpected (or expected) happened! It dropped by about 25% around US$43,000.
Easy come easy go
The sudden drop in the price of BTC goes to show just how fast one can profit or loss in the money markets especially in cryptos. This episode caused the cryptocurrency market to lose about US$400 billion. Such a change would surely cause panic and it did! When it is the stability you are seeking in BTC, then you will surely be disappointed. Are BTC and ETH as good investments as many think? A report was released recently that underlined certain issues that could cause the price of these 2 cryptos to destabilize. This goes without saying that if the 2 cryptos are very volatile, it affects the entire market. Such is the case of what happened in late February/ early March 2021. These issues are credible and should be taken into heavy consideration if anyone is planning to invest in BTC or ETH in the near future.
Technical disruptions and regulation
Collectively, BTC and ETH command the majority of the total trading volume when it comes to cryptocurrencies. Relying fully on digital platforms and exchanges, they are susceptible to many forms of disruptions and such. Forks, which are splits in the underlying network can be risky while they are also open to hacks. Meanwhile, with more recognition coming along, regulation could also mean another challenge coming up for these 2 cryptos.
Bitcoin’s creator and author
To date, there is still no confirmation as to who the creator of BTC is. Satoshi Nakamoto has been named but he has never admitted to the call. This means that if he or the pseudonymous person(s) who developed BTC came out to make the claims, it could severely disrupt the market. The creator is known to own BTCs said to be worth about US$30 billion or more. If that amount is transferred, it would definitely destabilize the market.