The volatility of bitcoin is one of the biggest problems affecting investors.
On Monday, Bitcoin plunged as much as $2,300 (around £1,600) in less than a minute, hitting its lowest level since the start of 2017.
In the first 24 hours of trading, bitcoin traded at $2.8 million (around €2.3 million).
“There are a lot of people who are just like ‘well we need to hold on to this’.
Well there are some other people who think it is a bubble and don’t want to sell,” explained Nick Johnson, the chief executive of CryptoFund, a cryptocurrency fund.
“And it is not.”
Johnson has previously told investors to be cautious, saying: “There is a lot at stake and you need to think through what’s at stake.”
Johnson believes the current volatility of cryptocurrencies could make it difficult for investors to buy or sell shares.
“It’s very difficult to buy and sell in the cryptocurrency world because it’s so volatile and so volatile,” he said.
“There’s a lot more risk that you could go wrong in this, it’s a much more dangerous market.”
Johnson said the volatility could make bitcoin’s trading fees and trading volume extremely expensive.
“Bitcoin is going to become more and more of a money making tool and a lot less and less of a currency, which could affect the prices of things like gold, silver, and other things,” he explained.
“So there’s a real risk that people are going to be left with a smaller and smaller piece of the pie.”
Bitcoin is not the only cryptocurrency to suffer from the volatility of its market.
There are several other cryptocurrencies trading at levels lower than what Johnson predicted.
The cryptocurrency Dash was down as much to $5.5 million (€5.4 million) in just under a minute on Monday.
“If you’re buying and selling bitcoins in the bitcoin world, you’re getting a lower price for your bitcoin,” he added.
“But if you’re just selling bitcoins you’re paying a higher price.”
This is because bitcoin’s price fluctuates based on how much money is in circulation.
The more bitcoin is in existence, the lower its price is.
But this is not always the case.
“The market is like a fishbowl.
There is a certain amount of money in circulation and so if you buy more bitcoin, the price will fall,” said Johnson.
“For instance, if I’m selling my gold and silver at the same time, my gold will fall more than my silver.
This is why bitcoin has been trending higher in recent weeks.”
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