Why Crypto is so Volatile

by Jun 21, 2022Articles



It’s both beautiful and terrifying.

One minute crypto is soaring up in value in a seemingly endless stream of infinite profits… The next negative news stories start to snowball and the price implodes.

The trouble is, as we’ve said before, the mainstream media don’t understand crypto yet.

They get ‘experts’ from the old world of traditional finance to talk about it.

And you can see the logic.

Want an expert on healthcare? Talk to a doctor. Want an expert on climate change? Talk to a scientist.

So why not get a banker to talk about crypto?

Because crypto technology threatens their very existence.

If you can make transactions faster, fairer, cheaper, more secure and more transparent. Why do you need them?

You don’t.

So asking someone at the top of a multi-billion pound traditional banking empire what they think of a technology that could replace them will always yield an interesting response. It’s like asking a tube driver what they think of automated trains…

“Bitcoin Prices Are Headed To $0.00”

Peter Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc and prominent financial commentator.

He’s regularly wheeled out by the media to discuss the state of crypto.

Here are a handful of his headlines:

August 2017: “Even At $4,000 It’s Still A Bubble”
(Bitcoin priced at $4,316)

December 2017: “Bitcoin Prices Are Headed To $0.00”
(Bitcoin priced at $15,036)

January 2021: “Those Who Invest The Most Will Lose The Most”
(Bitcoin priced at $32,198)

Feb 17, 2022: “Bitcoin’s Candle Will Soon Blow Out”
(Bitcoin priced at $40,558)

But here’s the thing…

We are still very early into crypto.

And because of this we are still locked into these cycles of massive volatility.

Which is great news for investors because it presents us with incredible opportunities).

What Schiff has done is weave a narrative based on something which contains a kernel of truth.

Speculators create enormous volatility

There are people who (understandably) still only see crypto as a weird, get rich quick casino.

They know nothing about the tech or utility.

They only want in because they want to make money right now. Whether they’re buying Bitcoin or Beanie Babies.

And when you have millions of people darting in and out of the markets trying to make enormous returns (or avoid making enormous losses) over very short periods of time you get enormous volatility.

Booms and crashes ensue and the price writes the narrative.

And that’s key to all of this.

Narrative follows price.

When I first got my head around that sentiment everything else (the wild swings, the bloodlust, the crazed headlines) fell into place.

We’ve evolved to be wary of new things… of things we don’t understand.

The media taps into that fear because it grabs attention.

That’s why during a downturn they report on every negative project and collapse within the crypto space.

And this narrative (based almost entirely on price) itself becomes confirmation that the whole thing is a house of cards…

And it’s this false narrative of only airing subjective scorn from the figure heads of traditional finance (the very thing Bitcoin was setup to better) that fuels more volatility.

New investors start to panic, egged on by a mainstream media screaming the end of days.

They panic sell…

And so the cycle of volatility continues.

But this is incredible news for us because we are still so early.

Every single bear market in crypto represents an opportunity to create potentially life changing wealth.

If you want to see how we plan to play the current downturn you find out more in the academy here.

The key takeaway

Narrative follows price.

In crypto when the price goes down and investors start losing their heads naysayers from traditional finance charge into the space waving their flags and banners, puking up fear and discord.

The people who make life changing profits from crypto are the ones who are able to zoom out, see through the FUD (fear, uncertainty, doubt) and time their entry.

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