Why are Bitcoin, other cryptos so volatile?

Why are Bitcoin, other cryptos so volatile?

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 or tied to that of another currency, commodity or financial instrument. The value of Luna Terra plunged by about 80 per cent, making the coins almost worthless.

Satoshi Nakamoto, the anonymous inventor of Bitcoin, designed the currency to circumvent traditional banking infrastructure after the 2008 economic crisis. When introduced in 2009, Bitcoin had a price of zero, and in July 2010, it was $0.09. Since then,