Bitcoin and volatility are two words that often go hand in hand. The cryptocurrency is often cited to be highly volatile, for good reason, and investors are cautioned against investing in the digital currency in the hope of getting rich fast.
While volatility means that the price of an asset may rise, it is just as likely to drop.For Bitcoin, after the highs of the past two years, the past few months have been rough. The world’s oldest and biggest cryptocurrency is down by 15.41 percent since the start of the year, and in the negative by 21.75 percent when compared to year-over-year prices.Also read: Is investment in 'volatile' Bitcoin better than purchasing gold?Bitcoin’s price decline has been affected by the Federal Reserve’s hawkish stance in the face of record-high inflation levels in the US, which has spooked investors into already pulling money from riskier assets.
For many investors, cryptocurrencies are risk incarnate.The fears of a potential conflict on the Russia-Ukraine border has further stoked fears and driven prices down. While Bitcoin had recovered to above $45,000 earlier in the week, simmering tensions and potential escalation once more eroded all the gains.Also read: Ukraine legalises cryptocurrencies amid tensions with RussiaThe price movement of Bitcoin has mostly followed other US stocks, which have had fairly volatile phases themselves, despite some standout performance in the segment.
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