2021 was an incredible year for bitcoin. Towards the end, bitcoin seems to have stabilized prices, but there was a high degree of volatility for bitcoin and other cryptocurrencies throughout the year. Towards the beginning of 2021, bitcoin reached the high price of $42,000. After that, however, it came back to 32,500 and lower than that later on. Apart from all this, in November 2021, bitcoin reached the value of $69,000, which is the highest of all time ever. Experts predicted that after reaching $59,000, it would go further towards the $100,000 mark, but it did not happen. Instead, it started to decrease, and now, the price of bitcoin is standing at around $50,000 in the market.
So, it is evident that cryptocurrencies are very risky, and people should be cautious while using them—however, people are reckless about it. People purchase large amounts of cryptocurrencies whenever possible. When there is a massive dip in bitcoin prices, people purchase these coins and sell them when the prices are higher. It is necessary to keep in mind that there is psychology among the people, making them purchase more and more cryptocurrencies. The reasons behind these are psychological, and therefore, you should understand them clearly if you want to understand the cryptocurrency market.
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Bitcoin is becoming people’s identity!
Bitcoin is playing a very crucial part for many people across the globe. Earlier, Millennials said that people who were just HOLD in cryptocurrencies are no significant ways of these digital coins. Earlier, those holding a small number of cryptocurrencies like bitcoin now have a massive amount of them, making them the most prominent players in the market. Therefore, people did not have any identity, but now, they are recognized by the number of wallets. When someone has a large number of bitcoins or any cryptocurrency in their wallets, they are considered the ways of the market, which is pretty much an excellent identity for someone who was just an ordinary man. Therefore, there is a rally going on in the market of getting an identity through bitcoins, making many people put their digital tokens in large amounts.
Social media
Social media platforms are also the center of spreading the popularity of cryptocurrency. Many celebrities from different corners of the world are engaging in cryptocurrency investments, and therefore, They are giving a certain mindset to the people. Many people are inspired by celebrities’ actions, which they love the most. Suppose that if a particular superstar has invested a lot of money in bitcoin, the followers also tend to do the same. When the celebrities move their coins, the fans believe them, and therefore, they also do the same. As a result, they make investments, leading to further increases in the cryptocurrency market.
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Excitement of volatility
Different people have different perspectives about digital coins like bitcoin. Some people believe that with bitcoin micro financing they can provide faster payment services and have a lower interest rate than the current one. They also had a mobile and online platform that can be used for the clients to conduct financial transactions.
great security services and convenience. However, others believe that cryptocurrencies are nothing more than just a gambling device. According to the CEO of Warren buffet, cryptocurrencies are nothing more than a medium of gambling, and hence, it promotes a lot of risk factors. Indeed, it can be utterly identical to gambling when it is thrilling and risky. It is fascinating for some people, and therefore, they prefer gambling with cryptocurrencies. The activities in the prices of bitcoins do excite many people across the globe, leading them to invest in these digital coins. When the volatility keeps happening, people seek the thrill out of it and start purchasing more and more amounts of these digital coins.
FOMO
Some multinational organizations and trading platforms have played a vital role in promoting cryptocurrency. Suppose that you have ten bitcoins at this point. There will be a period when the prices of bitcoins will go lower from $50,000-$40,000, and that would be the price time when you will be more capable of purchasing more coins. You will fear missing out, and therefore, you may decide to purchase more cryptocurrencies when the prices are standing at $40,000. It is a psychological behavior followed by many cryptocurrency investors when the prices of bitcoins go lower. Also, the same happens when the prices of bitcoins Increase drastically. When the prices are higher, people believe that there is a chance of prices going lower in the future and, therefore, the sale of their cryptocurrency assets.
