Volatility has been an important part of Bitcoin and its role is undeniable in Bitcoin price rise over the past few years. The asset has also been criticized for the same trait in traditional markets, as the token was considered highly volatile by the regulators.
However, despite the nit-picking of traditional asset class proponents, the volatility of Bitcoin has also been key to its wider adoption. Bitcoin’s price volatility has allowed the asset to reach the mainstream public. Its speculative nature has led to the creation of market curiosity, and BTC has started to attract the attention of the financial market.
Bitcoin’s 2017 and the market boom
Bitcoin may have been introduced to the world back in 2009 but was propelled to recognition after a massive rally in December 2017. Bitcoin’s valuation jumped all the way to $20,000, and news media around the world covered its growth. During the same period, Coinbase also became the most popular application in the United States as new users began to flock to the industry.
However, it’s important to note that Bitcoin crashed all the way down to $4000 in January 2018. Given the almost 80 percent fall in prices, a significant proportion of users remained in the industry. The same group of people started to gather more knowledge and stuck around in the space.
Kraken also saw a similar spike in sign-up in March 2020 with Bitcoin falling all the way down to $3800 on March 13. Bitcoin was back at $6995 at the press time, and data revealed that active BTC addresses have also improved in the past few months.
Bitcoin prices may go up or down, but Users continued to rise
A recent report for LongHash suggested that, according to Chainalysis, 90 percent of Bitcoin activity is related to exchanges. Exchanges are the prime institutions in the industry that speculated around the valuation, hence it is only obvious the users would flock in the most during times of price swings.
The above chart clearly illustrates that most searches of the largest digital asset have taken place during moments of higher price movement and these search trends were common all around the world.
The largest asset has been keen development on the technological forefront as well but the majority of people are only concerned with the asset’s valuation.
Hence, Bitcoin’s volatility has been a blessing in disguise for the largest crypto asset and it has been largely responsible for Bitcoin’s growth over the past 4 years.