How do you view the price fluctuations of Bitcoin?

There is a common belief that the price volatility is one of the main reasons why Bitcoin cannot gain higher adoption among the mainstream public. However, the truth may be quite different. Many people are actually attracted to Bitcoin precisely because of its extreme price fluctuations.

Think about it. When was the first time you learned about Bitcoin? Was it from a mainstream news report that exaggerated the unsustainable growth of Bitcoin prices, or was it from the recent burst of a short-term Bitcoin bubble? Of course, it could also be associated with crime: perhaps someone used Bitcoin to purchase drugs on the dark web, or a cryptocurrency exchange was hacked, resulting in the loss of hundreds of millions of dollars.

The key is, news is news: the price trend of Bitcoin, even if it is downward, still affects people's emotions. While many people initially view Bitcoin as a form of gambling, some may become deeply attracted to it once they start studying the original intention of Satoshi Nakamoto in creating this peer-to-peer digital currency system.

Regardless of price fluctuations,the number of users is increasing

There are many indicators to suggest that high volatility of Bitcoin is attractive.

Firstly, we can look at the current user base of Bitcoin and other cryptocurrencies. How do they interact with these cryptocurrency networks? According to blockchain analysis company Chainalysis, about 90% of the activity on the Bitcoin chain is related to exchanges—this indicates the impact of price fluctuations on speculative behavior.

Secondly, with Google Trends data, it is relatively easy to analyze people's interest in Bitcoin. As shown in the chart above, search volumes surged during several significant Bitcoin price fluctuations. Note that this is not unique to the Western world, as the chart below shows similar trends in Bitcoin searches on the Chinese search engine Baidu.

Interestingly, those of us who create content around Bitcoin, including myself, know what internet users like to see. You can check out my contributor page on Forbes and see that my most viewed articles are somewhat related to Bitcoin or altcoin prices. These are articles related to Bitcoin that can also drive traffic to news websites.

The general public doesn't care about Schnorr signatures, sharding technology, and the like. Most people simply watch the market.

The last indicator is the most direct connection between Bitcoin price volatility and the addition of users to exchanges. Whether the price skyrockets or experiences historic plunges, you can be sure that under media reports of price changes, the number of registered users on exchanges will skyrocket.

A typical example occurred at the end of 2017, when Coinbase briefly became the top app on Apple's App Store due to the skyrocketing prices of Bitcoin and a range of other cryptocurrencies.

On the other hand, after Bitcoin's price halved in mid-March this year, Coinbase, Kraken, and other exchanges saw a significant increase in user registrations.

However, the most important point is that Bitcoin is still in its value storage stage of development, so long-term users are happy to see price fluctuations (as long as the trend is upward). As Bitcoin gains more acceptance as a non-political store of value, its price will start to become more stable (as it has in the past). Once the price stabilizes at a certain level, people may be more willing to accept its function as a medium of exchange.

Until then, Bitcoin will continue to dominate headlines due to its dramatic price fluctuations, which will attract new users and strengthen its network effect, making this cryptocurrency a more useful tool for everyone involved.

This article is from our partner LONGHASH

Further Reading

• Exclusive Interview: Cardano Founder Talks About the Most Admired Cryptocurrency Projects, Well-Known Public Chains All Fall Short!
• Institutional Investors Haven't Left Yet! Global Largest Bitcoin Trust Fund Record Inflows Break Historical Records

Join Telegram now for the most accurate blockchain news and cryptocurrency updates!