Many have criticized and faulted Bitcoin, the largest cryptocurrency by market capitalization, using its high volatility as a yardstick. It has been argued over and again that BTC may not replace money in the future as it is technically envisaged in the crypto sphere similarly due to its unpredictability and the ease of facilitating money laundering.
However, Bitcoin seems not the only commodity with such high volatility. Other commodities/ assets such as Amazon, Yahoo, Priceline, and some others have also experienced substantial and intimidating price crashes at a particular point in time.
Bitcoin Volatility Not Strange
In defense of Bitcoin, macro-economist Riggs made the above assertion. In the statement, Rigg pointed the detriment of Amazon, Yahoo and Priceline to rebuffers of digital currency Bitcoin.
Riggs who claims to be a position trader stressed the calamitous crash of Amazon, Yahoo, Priceline and others in terms of price. According to his statement on Twitter, the aforementioned commodities experienced over 96% collapse in 2000 and the impact of this crash lasted for at least 2 years.
He said, “Many people try to talk negatively about Bitcoin volatility, meanwhile Amazon, Yahoo, and Priceline all COLLAPSED over 96% back in 2000 before minting millionaires. Early tech volatility is natural. Long term upwards volatility is the holy grail. Get used to it.”
He captioned the record of the crash with his tweet. Check it below:
High Volatility of Bitcoin (BTC) in Play
It has been noted that Bitcoin price is proportional to its volatility. This implies that the higher BTC price rises, the more its volatility becomes obvious and vice versa. In those days, when Bitcoin was still priced below a thousand dollars, the volatility was minimal.
As the digital currency rose above $1000, its volatility became more substantial. Now, BTC is able to lose or gain $2,000 within few minutes. That’s why traders and investors are warned perpetually to trade or invest responsibly and carefully.
Every business venture or commodity has its good side and side effect. In crypto trading, experienced traders always leverage the slight or high volatility of Bitcoin to accumulate gains, and sometimes, it boomerangs.
Such volatility is also in play in other markets, howbeit, it might not be as much as the crypto market governed by Bitcoin.
This same volatility was fully in action in the bull and bear market of 2017/2018. In 2017, Bitcoin commenced a bull run that pushed the price up to $20,000 in a very short while. From January 2018, the price of BTC began trending on the downside until it eventually bottomed to $3,100 level.