Bitcoin’s price volatility has a deep connection to market sentiment, similarly echoing the larger trend of how people pay–moving beyond cash. The new cryptocurrency fits with a long history of efforts to create alternatives to federal coins and paper cash. Each comes with its own advantages and unique hurdles to overcome.
Bitcoin’s meteoric ascent is just the latest chapter in an ongoing quest for simpler, seamless ways to transact. This evolution started way before us with the advent of checks, which created the ability to pay later and from a distance. The creation of the credit card transformed commerce even more, allowing people to make immediate purchases with a delayed payment.
Debit cards offered yet another option, instantly connecting purchasing power with bank accounts. Automated electronic payments between bank accounts provided a simple solution for regular bills and various other payments. Bitcoin quickly becomes the decentralized digital alternative in this constant development.
"BTC price movements are related to sentiment. Risk on, up. Risk off, down." - Ross Gerber
Bitcoin's value is influenced by market sentiment. While investor confidence can drive prices up, uncertainty can turn prices around just as quickly.
This speculative nature of Bitcoin is underscored by the volatility. And perhaps more importantly, it shows just how closely tied it is to overall economic trends.
Bitcoin has certainly been a big development in the ongoing transition from tangible currency. Like its predecessors, it has the laudable promise of increased efficiency and convenience.
