Insufficient Understanding of Cryptocurrencies Results in Their Volatility

Insufficient Understanding of Crypto Currencies Results in Their Volatility

admin Bitcoin Price Index, Cryptocurrencies, Cryptocurrency, In the News, Investments, Investors, Technology, The Future Of Money 0 Comments

Bitcoin made the news in May when it passed the all-time high of $2,700 per unit, before swallowing a sharp correction and losing almost 30 percent of its value in 48 hours. Along the way, many other cryptocurrencies such as Ethereum, Litecoin, Dash, Ripple and Monero have followed Bitcoin in its correction. This scenario naturally leads us to think about the last quarter of 2013, when Bitcoin price jumped from $130 to over $1100. After this boom, we didn’t see a sharp correction, but a long and steady decline to the unit price of $200, followed by a long and steady increase period. Will the same steady decline happen in 2017? The main difference between 2013 and 2017 is that the ecosystem of Blockchain and cryptocurrencies is widely more developed. We went from theories and white papers to proof-of-concept, real world applications and significant investments. Nonetheless, little are those who truly understand the underlying technology powering this ecosystem. An insufficient understanding of the market Investors have been pouring capital into the market, betting that consumer demand will propel future growth. Cryptocurrencies are therefore subject to significant speculation backed by very little analysis, which makes this asset class particularly volatile. David Z. Morris, a contributor …