KT Explainer series: Why are Bitcoin, other cryptos so volatile?

KT Explainer series: Why are Bitcoin, other cryptos so volatile?

In part three of our five-part series, Khaleej Times examines if cryptos are a ‘mirage’, as claimed by Warren Buffet, or the real deal

Published: Thu 26 May 2022, 10:33 PM Last updated: Thu 26 May 2022, 10:42 PM

While cryptocurrencies are catching the fancy of investors, their volatility is keeping many away.

This special explainer on digital assets takes a closer look at the volatile nature of cryptocurrencies.

Why is the crypto market so volatile? Is it safe to buy cryptocurrencies during the “dip?

And why are economists and business leaders, including Warren Buffet and Paul Krugman, calling crypto a “mirage” and predicting its demise, even as many ancillary technologies keep popping up around it?

Experts give their take on why cryptos are jumpy in nature and why the nature of the market is so volatile.

The cryptocrash of 2022

A fortnight ago, Bitcoin took a brutal tumble, dipping (briefly) below $30,000 (Dh110,193) for the first time since July 2021. Currencies such as Ether and BNB have also seen similar falls, leading to many experts talking of a “crypto winter”.

The fall of the Terra stablecoin made the overall crypto market unstable, wiping out more than $200 billion in the cryptoverse. Stablecoins are cryptocurrencies whose value is pegged