Why are crypto prices so volatile?

How is the price set?

Crypto prices are set by buying and selling pressure on exchanges. Eager buyers push the price up and eager sellers push it down. A share has company earnings behind it, and money has a government. Crypto prices rest mainly on expectations and confidence. Confidence shifts quickly, so prices do too.

What moves the price

1. Speculation and emotion

Many buy hoping the price will rise. Rising prices pull in more buyers through fear of missing out (FOMO), and falling prices trigger panic selling. Both moves overshoot.

2. Borrowed money (leverage)

Many traders take positions 10 or even 100 times their own money. A small move against them forces their positions to be sold (liquidation), and that selling pushes the price further. Chains of liquidations can cause big crashes within hours.

3. Big news and events

• Regulatory decisions in major countries (approvals or bans)
• Exchange hacks or collapses (FTX in 2022)
• Large institutions buying or selling

4. The global economy

When US interest rates rise, investors usually pull back from risky assets. Crypto often behaves like technology stocks in this respect.

5. Small markets and "whales"

Small coins have thin markets. A few large holders ("whales") can move the price a lot, which is where pump-and-dump schemes start.

6. The taka exchange rate

Seen from Bangladesh there is one more layer: the dollar–taka rate. The taka has weakened significantly since 2022, so prices in taka have moved differently from prices in dollars.

Some of the biggest crashes

Figures are approximate, based on Bitcoin's dollar price.

See today's price and recent changes on the Bitcoin price page.

Nobody can reliably say "it has bottomed, buy now" or "it will never fall again". Risking money you cannot afford to lose is dangerous, and crypto transactions are not permitted in Bangladesh.

Key points

• Crypto prices run on expectations and confidence, so they change very fast.
• Leverage, news, global interest rates and thin markets amplify the swings.
• When looking at taka prices, remember the effect of the dollar–taka rate.