Price swings are inevitable with such a young currency as Bitcoin. Nevertheless do many big investors think bright of the future of Bitcoin. The CEO of BTCC, a Chinese Bitcoin exchange, Bobby Lee almost shrugged off the violent price swings that have been seen this week pointing towards how young digital currency is as an asset. "It's not a problem," he said at the Rise conference in Hong Kong. "If you think about it, the volatility is natural for an asset class that is so new. There's no price discovery for it (yet).
This Video illustrates nicely that even tough Bitcoin lost value, it will not crash
Cryptocurrency prices are volatile because very few speculators actually understand the technology or its potential, leaving it vulnerable to reactive, emotion-driven swings.
For proof, just look at how closely various cryptocurrency tokens' prices are tracking each other, regardless of their often very different realities on the ground. Bitcoin is the first and most basic form of cryptocurrency, with a lot of adoption and stability, but relatively few features. Ethereum is a robust ‘smart’ system that is already being widely adopted for building complex data-sharing applications. And Ripple is a mostly privately-held solution focused on interbank transfers. Yet the three tokens' charts for the last few months are remarkably similar.That suggests very little close analysis by those buying into cryptocurrency (and likely a lot of purely algorithmic trading).
The fundamental reason for these massive price swings is that the promise of blockchain tech is simultaneously so profound and yet so far from fruition. Even if one accepts the idea that blockchains will someday underly everything from health records to insurance, the road to overhauling those systems will be long and winding. We’ll see many more rallies and retreats along the way but if you are willing to stay in for the long run you will definitely be rewarded.
The Bitcoin's scaling debate is deciding Bitcoin's future right now. That's why there is so much uncertainty in the price for more than a month.
In fairness, bitcoin has held its value in relative terms. No worries here
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