Digital currency and volatility go hand in hand
Digital currencies, particularly Bitcoin, have shown volatility in recent days, hitting an all-time high in early May before dropping again last week. The question on everyone’s lips is how high can digital currencies rise, and will other digital assets take over where Bitcoin leaves off?
Digital currencies have always been volatile.
“Digital currencies are in a bull market, and are attracting hordes of new investors,” said Blake Cassidy, CEO of micro investing app Bamboo. “Investing in any market carries some risk but we are witnessing the greatest change in global financial markets in generations,” he continued.
“With incremental micro investment, you can effortlessly grow your value over a longer term, avoiding the day-to-day changes in the market. Digital currencies, by their nature, are and have always been volatile. Micro investment protects you from major drops in the value of digital currencies, filling your digital money box over the longer term,” he added.
Digital currencies have established communities of entrepreneurs and developers building programs and products on the back of the success, and while there is some volatility in value, the growth of digital currencies like Bitcoin and Ethereum, over their life cycle have continued to gain. This has been demonstrated in products like Bamboo where the investment is incremental, smaller and less risky. Between 2012 and today, Bitcoin has bounced between $4 per coin to almost %55,000 per coin, and there will be no new bitcoins minted.
“Bamboo is a micro investment platform allowing subscribers to invest small amounts by rounding up and making periodical payments at their own pace. It’s easy to do, effortless and quick, only requiring a mobile phone and a bank account,” Cassidy continued. “The risks from a major change in the digital currency market for small investors in products like ours is much less.”
Digital currencies were created to democratize the global money markets which are dominated by the world’s most wealthy. They are a hedge against inflation and remove the power of the central banks to keep printing money. 25% of US dollars in circulation were printed in the last year alone, while digital currency is considered a whole new asset class. They might be traded but a finite in number and can’t be printed in the way traditional currencies are.
With major corporations making changes to payment methods to accept digital currencies, it demonstrates the relevance of these new forms of currency. They challenge the old-world thinking about who controls the world’s wealth.
“It’s likely there will be continued volatility in the digital currency market for the short term, and as new players enter the market, there will be some assets which are more successful than others,” Cassidy added. “While we expect a flattening out of the market at some point in the future, it would take a crystal ball and a keen mind to predict what will come next for digital currencies. Until then, we continue to encourage users to invest wisely, always seek independent financial advice and look at micro investment tools like ours which is simple, easy to use and fun.”
