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Bitcoin and the current market challenges

Bitcoin and other cryptocurrencies operate in an unregulated market, with several unforeseen risks. Find out the current market challenges.

illustration of a person sitting on a pile of bitcoins
Image: Open Geeks Lab

Thanks to Bitcoin’s meteoric rise, the crypto market has become one of the most popular go-to investment platforms for institutional investors and individuals worldwide.

The crypto market now boasts a capitalization of more than $3 trillion, with Bitcoin accounting for the largest share. Bitcoin is the industry pioneer, leading the adoption of cryptocurrencies into the global economy. 

However, the crypto market comprises thousands of altcoins competing against Bitcoin. While Bitcoin has the most significant impact on the market, it does not control the crypto industry.

Various factors are constantly at play, which could induce different market challenges. The following article explores the current market challenges and how they relate to Bitcoin. 


Volatility remains one of the key challenges to investing in cryptocurrencies. Unlike traditional stock markets that usually appreciate based on government regulations, the crypto market is unregulated.

That means no central authority exists to influence asset prices. Instead, Bitcoin and other cryptocurrencies’ prices grow and decline based on public perceptions or investors’ confidence in using them as payment and investment assets. 

Volatility refers to rapid and enormous price swings, often extremely difficult to predict. Bitcoin’s performance has also followed a similar concept, with significant price growth and declines.

Some analysts predict Bitcoin’s price may hit a million in a few years, but others also say it might lose its entire value. Nevertheless, Bitcoin prices have historically bounced back quickly and set new records. 

While many people view volatility as a significant market challenge, savvy investors argue it could also be a blessing.

For instance, volatility impacts disparities in Bitcoin prices across crypto exchanges. That allows traders to generate profits from buying and selling digital currencies on platforms such as

Most crypto exchanges provide charts and other tools to enable traders to analyze the markets and avoid volatility risks. 

Regulatory Pressures 

Bitcoin and other cryptocurrencies are decentralized. That means no central authority regulates the operations of the crypto market, including trading, mining, investments, and other activities. However, the industry’s rapid growth has convinced regulators to take a closer look.

That has impacted increasing concerns by several governments, citing the lack of regulations as a loophole for undermining their monetary policies and promoting illegal financial transactions. 

Some regulators have criticized cryptocurrencies for encouraging fraud, money laundering, tax evasion, drug trafficking, and terrorism funding.

bitcoin and $100 dollar bill
Image: Unsplash

They argue the decentralized crypto networks make it impossible to track illegal financial activities. That has seen some governments implement a few crypto laws.

For instance, many states and countries now require crypto businesses such as exchanges to obtain licenses. 

Other regulators also require traders and other crypto investors to declare their crypto earnings and pay taxes on them. Some countries like China have even passed laws to ban their institutions from dealing in Bitcoin.

Nevertheless, no universal consensus exists about Bitcoin regulations as some countries don’t know whether to classify Bitcoin as a payment method or an asset. 

While Bitcoin continues to operate as a decentralized currency, investors should consider the existing regulations in their states or regions before investing to avoid problems. 

Cyber Threats 

The crypto market is entirely based online, and all transactions are digitized. That ensures greater convenience and efficiency in financial transactions.

However, it also means higher chances of cyber risks such as theft, hacking, and fraud. Such cases have been experienced on most occasions, portraying crypto as a high-risk investment.

However, Bitcoin has one of the most secure networks, ensuring better protection for its users’ funds and data. 

Like other markets, the crypto industry also faces a series of potential challenges that every Bitcoin investor must understand for success. The current market challenges include volatility, regulatory pressures, and cyber threats.  

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