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Volatility: Prices swing wildly within short periods — as seen in 2021, with Bitcoin oscillating from under $30,000 to over $65,000, then crashing back down.
Market Speculation: Many investors buy crypto not for its fundamental value but for quick gains, fueling bubbles and making the market prone to sharp crashes.
Regulatory Pushback: Governments and banks see crypto as a threat to monetary control. They can impose bans, regulations, or restrictions, which can significantly impact prices.
The Bitcoin Boom and Bust of 2021
Bitcoin’s 2021 journey exemplifies how sentiment and external factors influence prices: