Some of this time, bitcoin has become one of the investment options for many investors. Likewise with other currencies such as DavorCoin. This is because bitcoin prices soaring high so that the main attraction for many investors. But in previous years, bitcoin had a spike and decline in value quickly. Then why are bitcoin prices so unstable? This is because the bitcoin price fluctuations in various international and local bitcoin markets are driven by many factors. Such volatility in bitcoin markets that do not yet have an index is generally accepted since cryptocurrency as an asset class is still in its nascent stage. However, bitcoin is able to experience volatility in the form of a 10-fold price change against the US dollar currency with such short time changes. For more details, here are some factors that influence behind bitcoin price volatility.
Strongly Affected by Various News
One factor that affects the instability of bitcoin values and prices is the presence of news that seems to frighten bitcoin users, including geopolitical events and government statements that bitcoin is likely to be regulated. Here, there are many headlines in finance and finance that generate fear for investors.
Perceive Value of Bitcoin Fluctuates
The perceive value of bitcoin fluctuates make the bitcoin similar to the gold. This statement has been regulated and decided by bitcoin core technology developers, in order to limit production to a fixed amount of 21 million BTC.
Too Many Factors in the Perception of Asset Value and Value of Bitcoin
The various perceptions of the cryptocurrency intrinsic value as a value store and value transfer methods also make the Bitcoin price instability. The function of bitcoin as a store of this value is to store assets that can be useful in the future by considering several possibilities. Later, the stored value can be stored or transacted with goods or services in the future. Whereas, a value transfer method is an object that used to transmit property in the form of an asset from one party to another. Because of these two factors, the bitcoin spot price varies against the dollar and other fiat currencies.
Small Option Value for High Currency Investors
In addition to the perceptual factor of asset value and bitcoin value, bitcoin volatility is also driven by holders of a large proportion of the total currency in circulation. For bitcoin investors with more than $ 10 million in ownership say it is not clear how they will liquidate a large portion of bitcoin and turn it into a fiat currency without moving the market. See also DavorCoin Review for DavorCoin investors.
Tax Implementation Affecting Price Volatility
The IRS (United States tax agency) states that the currency is one of the objects of taxation purposes that have a mixed effect on volatility, especially negative effects. On the negative side, the IRS says the property has 2 negative effects. First, additional complexity for users who want to pay via Bitcoin.co.id. Under the latest tax laws, users should record the currency market value of each transaction and no matter how small. In fact, this is what can cause some problems for its users. Second, the decision to mention bitcoin as a property for tax purposes could be a signal to some market participants and stated that the IRS is preparing and implementing stronger rules in the future. Given this stronger regulation, it will cause the rate of currency adoption to be slow to the point where it cannot achieve massive adoption that is essential to an overall utility in society.