Bitcoin’s recent decline shows that acute volatility remains a hallmark

Bitcoin has lost nearly 20 percent in less than two weeks, proving that extreme volatility remains a hallmark of crypto investing.

But in the world of Bitcoin, it is largely business as usual with a bullish belief intact – unlike traditional markets, where movements on this scale are met with alarm. The largest cryptocurrency rose higher after previously falling as much as 3.4 percent to $ 55,663 on Friday.

“This correction seems more like a natural respite in a bull run, as well as a healthy flush of leverage,” said Noelle Acheson, head of market insight at Genesis Global Trading. “Meanwhile, mainstream awareness continues to spread, adoption continues to grow, market infrastructure continues to evolve, and the Taproot upgrade sets the stage for even more progress in Bitcoin’s potential use cases.”

Some analysts say a sharp setback is normal after prices rose 40 percent in October. China’s crypto intervention and new US tax reporting regulations, which are considered unfriendly to crypto investors, have also dampened sentiment.

“During the Bitcoin winter of 2016/17, it was what really took the wind out of the cryptographer’s sails as interest rates rose and liquidity drained from the system,” said Jamie Cox, a financial advisor and managing partner at Harris Financial Group.

Price fluctuations of 20 percent or more are not uncommon among cryptocurrencies. After hitting a record nearly $ 65,000 in early April, Bitcoin fell more than 50 percent in late June before rising again. After hitting nearly $ 53,000 in early September, it retreated by about 25 percent over the next few weeks.

Supporters of digital assets are accustomed to large fluctuations and often unafraid of withdrawals. They often see Bitcoin as a modern store of value and inflation hedging, although such arguments are controversial.

“When we see a great movement, we take a step back and say, has anything fundamentally changed? Has there been a significant event or development, or is it driven by currents and transient emotions?” said Hunter Horsley, CEO of Bitwise.

“This move is similar to the last,” Horsley added. “When we look at the basic thesis and drivers of space, they continue to look incredibly optimistic.”