Why Bitcoin is volatile

When we say Bitcoin is volatile, we mean the price of Bitcoin is volatile. The spot rate of Bitcoin at various exchanges changes every moment and, moreover, it functions 24/7. Hence, any user or community member of Bitcoin is perturbed by the regularly changing price of Bitcoin. The following chart shows the price fluctuation of Bitcoin over the last financial year:

The volatility of Bitcoin is the most discussed topic and has been a concern for investors, miners, and supporters of Bitcoin since the exchanges of Bitcoin came up. Some prime reasons for this as follows:

• Security breaches: This has been a major issue in the price fluctuation of Bitcoin in the past; whenever news of security flaws at an exchange's end comes up, the price of Bitcoin takes a hit, since this makes the investors start to doubt a certain exchange or the Bitcoin network.
• Legal issues: There have been many doubts by global lawmakers who make predictions on Bitcoin's price or even try to label Bitcoin as a non-legal entity. Various statements by the governments also hamper the price.
• Psychological shift in adaption: Bitcoin, although getting adopted and supported very quickly, is still a new currency and is very different from anything that came before; this leads people to be wary of adopting it. Plus, any negative press directly impacts the adoption of Bitcoin, which sometimes creates a downward spiral in price until any positive news surrounding Bitcoin surfaces.

The preceding points are just some of the prime points that are causing a huge volatility in the Bitcoin market. There are various other factors that play a vital role in the price fixtures of Bitcoin from time to time.