From the moment when the price of BTC and many other cryptos started to rise again, we can notice that people started to speak about this market again. On the other side, many experts in this area were talking about the potential more significant crash, but also about the recovery that will come after that, which might even lead to those positive predictions that we could read about in 2023.
On the other side, you should never rely on predictions of any kind since a lot of them are shared by people who are either trying to affect people’s actions or simply don’t have the right knowledge and skills in this area. A much better solution would be to join a community where you can consult with experts who are active in this market, like bitcoinfocus.org
The situation with this market was not so great in 2023 since all popular options lost a lot in value. That leads skeptics to be even surer that they are right about their predictions that this whole market will become worthless, and that it is a matter of time when that will happen. However, it is much more complex, and this market still has a lot to offer. Here are the main things people get wrong about volatility.
1. It is Controlled By A Higher Instance
This is one of the most common misconceptions that we can hear from many people. Lack of knowledge and wrong time some people made for their investments might be the main reason for that. For example, buying during last year during peak values.
Also, we have to mention that there is not a single proof or indication that there could be some institution or system that will change the values of crypto in any direction. Values are dictated by various factors, and it is crucial for investors to learn more about them.
2. It is The Same As Gambling
It became popular in the last few years for many people to mention that investing in this area is the same as placing money on some sports events or testing your luck by playing on some virtual machine. That is far from being true. However, high expectations of people made this misconception spread quickly.
People should treat this market more in a way as other options markets, especially those where you can invest in bonds. The reason is that the real value and benefits of investing in shares will come over time, not overnight. Millions of people were buying crypto and day trading in hope that they will earn easy money. That is one of the factors that caused the breakdown as well.
3. It Follows the Global Economy
The world economy was critically hit by the quarantine and various measures that had to be introduced during a pandemic. The real effects and economic challenges are yet to be faced in the years in front of us. According to many economic experts, chances are great that the world will face another recession, which might be even worse than the one in 2008.
Moreover, people are forgetting that one of the main reasons why crypto is created in the first place was to represent a model that will provide a flexible and free market without any higher authority can control it. In that matter, financial struggles and other issues have nothing to do with the volatility seen in this market.
4. Issues With the Energy Supply
It is quite simple to understand why problems related to the supply of electricity and its production that is seen all over the world cannot be linked to the decrease in values of all crypto. In case it was connected in some way, the prices would be much higher due to lack of resources and difficulties in mining.
What Are the Main Factors?
While there are many misconceptions, there are also real reasons that can lead to significant changes in values. First of all, when there are drastic changes in supply and demand, and when people are selling more than buying, it is natural that the values will go down. That is one of the reasons why prices are falling. A lot of people were hit by financial struggles. Therefore, a lot of them decide to cash out the units they had on their e-wallets.
When there are millions of people who are trying to convert crypto into fiat currencies at the same time, it is not a surprise that the market value will drop as well. Another reason is related to big investors. One of the most popular names in this market is Elon Musk. He also represents a perfect example of how big investors could affect the market in their favor, and that was seen in the first quarter of 2023.
The next thing is related to increased issues with security. A lot of big online crypto exchanges faced cyber-attacks, even those that were considered safe and reliable. That led many people to either get out of this market or simply store their crypto on cold wallets and stop being active for some time.
The false predictions and spread of fake news can also be considered as a factor that affected the values. As we already mentioned, you cannot expect to invest a couple of thousands, and get a profit of more than 10 times in a short period, especially when a lot of people are trying to achieve the same.
It is crucial to focus on the real benefits of crypto to understand why it is the future even though there are some issues occurring in recent times. While many people are giving up on this market, those who are aware of the real values that crypto can reach consider this period of high volatility and drop in values as a perfect moment to invest more in different options so they could get a much higher profit over time. Keep in mind that blockchain technology is the safest model of transactions that exists today.