What Determines Bitcoin Volatility

Bitcoin’s volatility primarily arises from market uncertainty surrounding its intrinsic value and future pricing. A critical aspect of its supply dynamics is the halving event, which occurs every four years, cutting the rate of new Bitcoin issuance and reducing its inflation rate. This predictable reduction in supply plays a significant role in influencing Bitcoin’s price volatility over time. As of today, Bitcoin is ranked as the 10th-largest asset by market capitalization, reflecting its evolution from a niche cryptocurrency to a prominent asset within the global financial landscape.

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