This section will answer the question of how often does Bitcoin value change and what are the reasons behind its volatility.
How often does Bitcoin value change?
While there’s no definitive answer to this question, we can still figure out some patterns in how Bitcoin’s value changes over time.
In the last decade, Bitcoin experienced a bull market every two years on average. During these short periods, Bitcoin’s price has been observed to rise significantly. The biggest bull run was in 2017 with over 1500% gain in about 4 months.
Unfortunately, these enthusiastic time frames are usually followed by longer periods of bear markets, where the price steadily decreases over time.
Meanwhile, in these bear markets, temporary price increases or “local highs” can occur, which are great for making profits on short and mid-term trades.
All in all, when looking at the big picture, Bitcoin’s value has been steadily increasing since it hit the market, with a few spikes and drops in between.
What factors contribute to Bitcoin’s volatility?
Although price movements are unpredictable, there are several factors that influence how Bitcoin’s value changes:
- The supply and demand for Bitcoin.
- The increased difficulty of Bitcoin mining.
- Regulations about its usage, exchange, and taxing.
- Media influence and political events.
As Bitcoin isn’t governed by any central institution, it’s up to the users that decide the coin’s price.
If the market sentiment is bad the price might fall quickly.
On the other hand, if the market sentiment is positive, the price might increase drastically.
How can I protect the value of my coins?
Investing in cryptocurrencies can be risky, but also quite profitable. Still, there are some measures that will protect you against risks:
- Educate yourself about Bitcoin, the technology and the solutions it brings.
- Follow the news and happenings in the crypto sphere.
- Adopt a Bitcoin first mentality. Stop counting the value of your funds and instead focus on your BTC holdings.
- Practice and improve your emotional intelligence.
- Use dollar-cost averaging to buy Bitcoin. This will help you reduce your dependence on the buying price and effectively decrease the impact of volatility on your investment.