The story borders on cliché – your Bitcoin holdings are worth $1,000 when you go to bed, soar to $2,000 overnight, and are worth $500 when you wake up. What’s the deal with that?
Although it has a market cap of some $189 billion, Bitcoin behaves like a small-cap stock with a price that moves up and down in response to market perception and market reality. The day traders buy and sell their crypto as often as they think it’s profitable to do so, and the famous HODL camp clutches their BTC on the expectation that its value will not only stabilize, but soar in the long term.
So what causes the fluctuations in this value that spells agony and ecstasy for the crypto community? Well, there’s no single cause.
It’s difficult to identify a cryptocurrency’s intrinsic value.
It’s hard for something to hold conventional value when it doesn’t sell a product, earn revenue, or drive employment. Cryptocurrency on its own does none of these things. It almost universally doesn’t return a dividend, and only a fraction of a currency’s total value goes toward its further evolution and development. Read More...