Bitcoin is like a temperamental teen adolescent.
Up one moment and the life of the party.
Then down the next… and we’re all holding our breath walking on eggshells.
Feeling misunderstood, misinterpreted and unappreciated.
Ironically, so is Bitcoin.
Bitcoin is extremely volatile, and when it comes to trading bitcoin, people often misunderstand, misinterpret and miscalculate.
A common phrase floating around lately…
I own $500 worth of bitcoin
This statement is technically flawed and can only be true at one point in time.
And leads to the top 3 biggest misconceptions of bitcoin pricing:
- Bitcoin price is not prone to fluctuations
- Bitcoin value is set to fiat currency
- Bitcoin value should always be valued to USD/GBP/EUR
The economic principles of supply and demand apply to apply bitcoin, as such, the market value changes.
In January, Bitcoin was $1212
June 23, Bitcoin was $3409
July 15, $3000
August 20, $4600
August 29, $4200
At the time of writing: $4419.92
[edited] As at November 29, $10,000, and on December 12, $17,366.
The graph below illustrates the price up until October.
If you bought $500 of bitcoin on June 23, you have 0.1 of a bitcoin. This doesn’t mean you own $500 of bitcoin. It actually means you own 0.1 bitcoin.
On June 29, the value of your 0.1 bitcoin would be $257.
Come August 10, the value of your bitcoin …. $336.
That’s perceived value and it is always changing. Check today’s price on coinmarketcap.
Of course, that doesn’t matter until you actually sell it.
Same rules apply. You own 0.1 bitcoin. When making a transfer you’re transferring 0.1 bitcoin, not $250 of bitcoin. The value changes, depending on the day you’re looking at it.
Again, it may have been $250 now, but $375 tonight, or $1900 tomorrow etc.
How Bitcoin price fluctuations may affect you, and your Wirex transaction
Like you, Wirex too is trying to deal with the temperament of Bitcoin’s ever-changing price.
To calculate our rates, we have a liquidity pool of providers (W-Pay), who compete for the best exchange rate at the time of your transaction. We’re focused on expanding this network of providers to ensure you get the lowest and most competitive exchange rate, always.
Zero blockchain fees between Wirex Community
Furthermore, if you have been following, you may have heard we recently upgraded our platform (in preparation for Segwit), to eliminate blockchain fees for internal transfers between Wirex customers. That’s right, there is no blockchain fee when transferring to another Wirex account.As a Wirex
As a Wirex customer, you’re getting the best rate at the time of your transaction, guaranteed. AND you won’t get any blockchain fees when transferring within the Wirex community.
There’s still a long way before Bitcoin matures… until then we’re going to have to learn to make her volatility work for us.
If you’re not convinced, or just want to keep reading, check out our blog ‘Wirex stole my money’.