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Historically, Bitcoin's value has been quite volatile. In a single day in May 2021, the price of Bitcoin plunged by about 30% before recovering to be down about 12%.2 But why is Bitcoin so volatile? Here are just a few of the many factors behind Bitcoin's volatility.
News events that scare Bitcoin users include geopolitical events and statements by governments that Bitcoin is likely to be regulated, as well as moves by prominent individuals and companies. For instance, tweets by Tesla Inc. (TSLA) CEO Elon Musk suggesting his company would no longer accept the cryptocurrency as payment for its vehicles may have prompted the massive sell-off described above.3 Bitcoin's early adopters included several bad actors, producing headline news stories that spooked investors.
News events that scare Bitcoin users include geopolitical events and statements by governments that Bitcoin is likely to be regulated, as well as moves by prominent individuals and companies. For instance, tweets by Tesla Inc. (TSLA) CEO Elon Musk suggesting his company would no longer accept the cryptocurrency as payment for its vehicles may have prompted the massive sell-off described above.3 Bitcoin's early adopters included several bad actors, producing headline news stories that spooked investors.