Why Bitcoin Continues to be Popular Despite High Volatility

Bitcoin was introduced as a cryptocurrency in 2008 by an individual or a group of persons named Satoshi Nakamoto. In 2009, it was released as open-source software. Bitcoin is a decentralized digital currency, also called cryptocurrency, that can be transacted between users on a peer-to-peer network. The crypto is not controlled by any intermediaries or Governments, unlike fiat currencies. All transactions are recorded on the public distributed ledger Blockchain and verified by network nodes through cryptography. Bitcoins are created as a reward for mining the coins and buying other products, services, and currencies.

Bitcoins are registered to specific addresses on the Blockchain. Fixing a Bitcoin address is easy and requires selecting a random private key and computing the matching Bitcoin address. This whole process can be done in a few seconds only.

Why Is Bitcoin Gaining Popularity?

There are several reasons for the increasing popularity of Bitcoins. The first is the acceptability of the crypto in transactions affecting the daily lives of people. Businesses are increasingly accepting Bitcoins as a mode of payment. This is not limited to large real estate agencies or corporations, but even the local neighborhood coffee shop has joined the fray. Hence owning Bitcoins is the go-to thing and has pushed up demand and popularity.

Next, no transaction fees are charged as compared to traditional currencies. This is because Bitcoins are not controlled by any central authority or financial institutions. Generally, banks charge substantial amounts in transaction fees from both the receiver and the sender for money transfers, which is not the case with Bitcoins. Additionally, transactions are quick and completed in hours, whereas the same in usual currencies might take days.

Portability is another factor behind the popularity of Bitcoins. While currencies, including debit and credit cards, have to be carried in a physical wallet and handled in a store, Bitcoins are stored in a digital wallet on any electronic device. Hence, the question of loss or fraud does not arise. 

Why Is Bitcoin Highly Volatile?

The primary reason why Bitcoin price is so volatile is the speculation aspect. Even though Bitcoins today are widely used for buying physical goods, the real use of the coin for Bitcoin holders is investments. Hence, people buy and sell Bitcoins just like they would any other investment instrument. The buy-sell mode of Bitcoins is what makes the value so volatile.

The next point is the public perception of digital currency. Most people are not aware of the intricacies of crypto, and hence Bitcoins often get bad press. When large numbers of investors believe this, panic sets in, and there is a spate of selling, leading to a downward spiraling of prices. Invest in Bitcoin through an automated trading platform like Bitcoin Code and get a good chunk of profit from it. Find out more details on Bitcoin code from the official website or reviews by crypto experts.

Government rules and restrictions by regulatory authorities are also responsible for this volatility. Bitcoins are not governed by Central Banks or any currency-issuing agency. Hence there is always a fear of Bitcoins being used to finance illegal activities, and governments tend to clamp down on the use of Bitcoins in the country. This again leads to a sharp fall in prices.

On the brighter side, Bitcoin, like gold, is considered to be a safe haven for investors. During a recession or economic downturn, people opt to buy Bitcoins as it is not touched by regularity policies. This makes the value of Bitcoins go through the roof, as has been proved during the recent Covid-19 pandemic. Since Bitcoin is globally accepted and the most popular crypto globally, it is not monitored by any country’s regulatory authorities. This, in turn, gives an opportunity to bitcoin traders to gain profits through arbitraging in Bitcoin as it is seen that the prices of Bitcoin do vary on various exchanges.


Bitcoin may be volatile, but it is also gaining in popularity as it is a preferred option for investors as well as for people who want to carry out routine buy-sell transactions without carrying physical cash. Even though prices tend to crash at times, historically, the coin’s value has always bounced back, if not always, to the previous levels.

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Michael Mowery is CoinSubtle's one the best full time news editor and ICO analyst. He is passionate about blockchain technology and cryptocurrencies. He always stay updated with latest happenings in fintech industry. He also contribute his insights on upcoming ICOs.

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