Bitcoin’s Volatility: Is It Too Unpredictable for Long-Term Investment?

• Growing skepticism about Bitcoin’s future highlights the need for cautious, strategic investment.
• Regulatory uncertainty and security risks contribute to Bitcoin’s volatile market behavior.
• Investors are advised to diversify portfolios and stay informed to manage Bitcoin’s high risks effectively.

Although Bitcoin (BTC) and other cryptocurrencies originally inspired novelty and were expected positive changes in the financial industry, the situation in the cryptocurrency market is otherwise. This paper discusses how most of the investors who identified Bitcoin as an investment opportunity of the future are let down by its reality. The uncertainty of the market has caused

Bitcoin’s Difficult Adoption Path

The phenomenon of evolution of bitcoin from a virtual currency unfamiliar to the international market to an established asset class is accompanied by highs and lows. The working assumption of bitcoin’s early days was that it was a new form of money that was supposed to be the global currency. However, despite the fact that the existence of Bitcoin is growing at a very high speed than any other virtual currency, it has not yet been accepted as the new generation currency.

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Despite initial optimism, skepticism towards Bitcoin’s future is growing due to unmet expectations, emphasizing the need for strategic investment decisions.
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— Cody Brian Cole (@Coleracin77) November 15, 2024

In this case, despite the 2021’s attained record high, the value of bitcoin has been volatile which may make investors change their mind about the asset. The dramatic drop in its price has further fueled perception of volatile behavior.

The Challenges of Regulation and Security

Bitcoin is still regarded as an instrument that creates a large number of stirring questions regarding the regulation. Some governments and regulatory authorities are getting more strict to cryptocurrencies, as certain countries have propounded new laws. This has led to questions whether bitcoins will continue to be traded in areas where the government exercised more stringent measures and whether the government will interfere in the market.

Further, a number of security threats are found in the Bitcoin system and some exchanges and wallet providers have already been hacked and robbed throughout the course of the previous year. Due to such security risks, potential investors may tend to be very careful of any investment opportunity since their properties may be at risk .Due to the high volatility of the BTC market, other professionals call for more rational ways of getting involved with the digital currency.

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