Extreme volatility remains a hallmark of crypto investing
Published On: Sunday, November 21, 2021 | By: Team KnowMyStock
As Bitcoin has lost almost 20% in less than two weeks, it looks like extreme volatility remains a hallmark of crypto investing. But, it’s largely business as usual with bullish conviction intact in the bitcoin market. whereas in traditional markets moves on this scale are met with alarm. The largest cryptocurrency edged higher after earlier slipping as much as 3.4% to $55,663 on 19th Nov.2021. Some analysts say a sharp pullback is normal after prices skyrocketed 40% in October. China’s crypto crackdown and new U.S. tax-reporting provisions that are being viewed as unfriendly to crypto investors have also soured sentiment. “During 2016/17 Bitcoin winter, the thing that really took the wind out of the sails of crypto was when interest rates rose and liquidity was draining from the system,” said a financial expert.
Price swings of 20% or more aren’t uncommon among cryptocurrencies. After hitting a record of almost $65,000 in early April, Bitcoin slumped more than 50% by late June before turning higher again. After hitting nearly $53,000 in early September, it retreated about 25% over the next couple of weeks.
Experts of digital assets are used to big swings and often undaunted by pullbacks. They often view Bitcoin as a modern day store of value and inflation hedge, though such arguments are controversial.
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