All of us as Bitcoin traders are aware that the Bitcoin value fluctuates, and it fluctuates so much that sometimes it becomes really hard to speculate on the market. But at the same time we also know for sure that it is this very volatility in Bitcoin pricing that makes the market suitable for trading and the potential for money-making in-turn. Arbitrage fundamentally lies on the principle that there is a price differential between two markets, that is, the Bitcoin value fluctuates. Bitcoin fundamentally lies in the principle of arbitrage, the main mechanism used by most to make money out of it. But so to gain immensely, one must be able to foresee the expected fluctuations well in advance, and in-order to do so, one must understand why the Bitcoin value fluctuates.
Why Does the Bitcoin Value Fluctuate
This is perhaps one of the most important and one of the most beginning query of any trader, when he sets in to make some trade, as to why the Bitcoin value fluctuates. There are multiple factors that are intertwined to make this fluctuation take place.
Top Reasons behind Bitcoin Value Fluctuation
1. Market News: This is the most common reason that causes a price shift in the price of the Bitcoin token. Whenever there is some huge market news, even from some streams other than cryptocurrency, it tends to impact the financial market overall, and Bitcoin responds very quickly to such changes. Prices usually move back to their equilibrium at some point after such changes happen, but these durations of Bitcoin value fluctuations are considered best by apt crypto traders to make out big profits.
2. Comparative Worth: Bitcoin is also considered to be an investment venue like gold, silver and platinum. So the price of this particular token changes with respect to changes in the prices of other such investment apt commodities. For example, if the price of gold goes too high, investors look for other places to bury the money, and thus the demand of Bitcoin increases. This will cause the Bitcoin value to fluctuate.
3. Deliberate Price Fluctuations: Many-a-times, the bigger players of the market tend to cause some shifts in the demand and supply to manipulate the market. They do this on purpose, to materialize their own long term strategies with respect to Bitcoin. But whenever they make a bulk buy or sell, that does cause a wave of fear and alertness in the market, and cause the Bitcoin value to fluctuate at once.
4. IT Aspect: Bitcoin is based on blockchain technology, and is a recent development if we take into account the number of years that has elapsed since its inception. As a result, there are sometimes some malicious attacks on the software or technology, and sometimes some breakthrough developments in the same. This also answers the question as to why the Bitcoin value fluctuates from time to time.
Gaining the best out of these fluctuations becomes a lot easier with experts like executium.com, who not only carry out trades on your behalf, but also kind of train you treading the path.