|
The cryptocuurency market is highly volatile and some people see it as an advantage why other see it as something to be afraid off. Here are some reasons for the volatility in the cryptocurrency market.
1. No intrinsic value
Despite company sized valuations, cryptocurrencies don’t sell a product, earn revenue or employ thousands of people. They generally don’t return dividends, and just a tiny amount of the total value of the currency goes into evolving it. Because of this, it is hard to value. How do we know if it is overbought or oversold? When is it a good value or overpriced? Without any fundamentals to base this information off of, we can only rely on market sentiment, often dictated by the media that makes money on viewership.
2. Lack of regulatory oversight
Cryptocurrency is a worldwide phenomenon, and while governments are clamping down on the industry, regulation is still in its early days. Such limited regulation allows for market manipulation which, in turn, introduces volatility, and discourages institutional investment, since a large fund has no assurances that their capital is truly secure or at least protected against such bad actors.
3. Lack of institutional capital
While it is undeniable that some pretty impressive venture capital companies, hedge funds and high net-worth individuals are both fans of and investors in crypto, as a segment, most of the institutional capital is still on the sidelines. As of this writing, we have limited momentum on a crypto ETF or mutual fund. Most banking heads admit that there’s some validity in the space, but have yet to commit significant capital or participation publicly. Institutional capital comes in a variety of forms, such as a large trading desk that has the potential to introduce efficiency and soften market volatility, or a mutual fund buying on behalf of their investors for the long term.
4. Thin order books
Crypto investors are taught to never keep coins on an exchange, which can be hacked. As a result, most of the tradable supply is not on an exchange order book but in off-exchange wallets. In contrast, nearly all of the tradable stock of a publicly listed company is transacted on a single exchange. A large market order can eat into an exchanges order book on the way up or down, causing something called “slippage.” We saw an exaggerated example of this in GDAX Ether flash crash, but less extreme versions of this occur on a daily basis. Because of the capacity for large traders to move the market in either direction and employ tactics to encourage this, volatility goes up.
5. Long term vs. short term
If you invest into something that you don’t expect to take out until you’re 60 years old, then you are probably less concerned about it’s daily or even yearly price movements, thus you’re less likely to trade it. Cryptocurrencies, for the most part, can’t be bought in retirement accounts, and are generally inaccessible to retail brokers and financial advisors, so an entire ecosystem of investors is left out. This leaves us with early adopters that are comfortable with the technology hurdle of dealing with wallets, and web-based trading platforms, the same ones that are refreshing Blockfolio every 10 minutes, high-fiving each other when the coins moon, or sweating in a panic when the price drops. These are the same kind of people who don’t have the discipline to just buy and hold for the long run, and therefore contribute to the panic sells or FOMO buys.
6. Herd mentality
Crypto is largely a phenomenon of millennials, who distrust government, are early adopters in tech, and have been mainly shunned out of investment wins earned in the last decade of rising real estate and stock market prices. But most millennials do not have the long-term investment experience of their more mature generational counterparts. They also tend to have less disposable income as a result of historically poor job economics, and less time in the workforce. This combination of factors results in a few things; an appetite for risk in the hopes of landing a windfall of cash and utilizing a larger share of whatever capital they have to invest in risky instruments, including purchasing such investments on credit. When the market goes down, this is money that they literally cannot afford to lose, so will dump at the first sign of trouble. Since this is a reactionary behavior, they will generally lose money before getting out of the market. When the market starts surging up, they will buy with the money they don’t have. As a group, this appears to be coordinated en masse, but it is just the motivations of many single entities that propagate into a herd mentality. If you pair this behavior with the swings caused by large ‘whales’ in a thinly traded market, you have a synergistic effect.
I will be glad to hear your view on the subject matter.
|
|
|
|
Those are just few of the reasons which are in my list. In my opinion crypto currency is having lot of characters and algorithms which makes it X-Proof and thus its not just the identity theft proof or fraud proof but many other characters that are involved which makes things go perfect for normal investor of the crypto. Many benefits are their which are also making investors come and taste the world of crypto currency. For example huge profits gain, less loss if played very well, N-number of ways to earn money from the crypto currency. Above this, crypto also provide whole new world where you can safeguard all your real life assets and have great alternatives too.
Thank you for shedding more light on the subject matter. I am open to more opinion from experts like you |
|
|
|
Thing we need at cryptocurrency now is acceptable payment. Cryptocurrency need to be accepted by stores, merchants, companies, and individuals.
You are right but as you can see, there has been development in these areas if you compare with when cryptocurrency first came into being. With more enlightment, the acceptability will increase. Thank you for giving your opinion on the matter |
|
|
|
|
THESE ARE THE FIVE REASONS YOU HAVE TO GO FOR CRYPTOCURRENCY
A cryptocurrency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information. Cryptocurrency is defined by Investopedia.com as a decentralized “digital or virtual currency that uses cryptography for security” making it difficult to counterfeit. Since it is not issued by a central authority, governments can’t take it away from you.
Over the last couple of years, digital currency has been rapidly gaining the public eye. Here are some good reasons behind it.
• Fraud-proof: When cryptocurrency is created, all confirmed transactions are stored in a public ledger. All identities of coin owners are encrypted to ensure the legitimacy of record keeping. Because the currency is decentralized, you own it. Neither government nor bank has any control over it.
• Identity Theft: The ledger ensures that all transactions between “digital wallets” can calculate an accurate balance. All transactions are checked to make sure that the coins used are owned by the current spender. This public ledger is also referred to as a “transaction blockchain”. Blockachain technology ensures secure digital transactions through encryption and “smart contracts” that make the entity virtually unhackable and void of fraud. With security like this, blockchain technology is poised to impact nearly every segment of our lives.
• Instant Settlement: Blockchain is the reason why cryptocurrency has any value. Ease of use is the reason why cryptocurrency is in high demand. All you need is a smart device, an internet connection and instantly you become your own bank making payments and money transfers.
• Accessible: There are over two billion people with access to the Internet who don't have rights to use to traditional exchange systems. These individuals are clued-in for the cryptocurrency market.
• You are the owner: There is no other electronic cash system in which your account is owned by you.
CONCLUSION
This is my personal view and I will be glad if you can also drop your view on cryptocurrency.
|
|
|
|
|
If you notice, the market is gradually coming back. It might not be up to the end of the year when it will fully recover. No one can say specifically when it will be but it will surely recover and it is going to be very soon
|
|
|
|
|
In my own opinion, I think the time to buy is when the price is low and the time to sell is the time the price goes up. This is how someone can make profit from trading cryptocurrency
|
|
|
|
|
The best way to make money in this time of fall in the prices of coins in the cryptocurrency market is to acquire more coin when the prices are low and wait for the prices to go up for you to sell and make good profit. You can also engage in airdrops and bounties which entails that you do some sort of assignments given to you by the team members. After doing all the assignments, you will be rewarded with token which you can sell and make money
|
|
|
|
|
The best coin to hold for a long term depends on some qualities which the supposed coin. Some of the qualities are: you consider the usecase of such coin because a coin with good usecase will stand the test of time and also it will ensure that there is always demand for the coin. Also you have to consider the team of members behind the project because a good project always have dedicated and trustworthy.
|
|
|
|
|
Truly there are lots of ICOs in the cryptocurrency world but i think what you need to consider in choosing good ICOs are: the team behind the project, the uses that the project coin is going to be used for because this will ensure that the coin is always demanded by people also you have to consider the promotional programs that the team is making use of.
|
|
|
|
|
Though ETH value is low now, it will surely bounce back because this is not the first time such is happening and ETH is not the first cryptocurrency such will happen to. This is happening because of the volatility in the cryptocurrency market. This gives room for downward or upward movement in the prices of cryptocurrencies.
|
|
|
|
|
I will advise you to hold till the price appreciate for you to sell because if you sell now, you wont make profit and such can discourage you from investing into cryptocurrency in the nearest future. This is the time for you to even buy more so that you can make more profit when the time comes for you to sell.
|
|
|
|
|
Invest in any coin that has good usecase even though all prices are low now but a coin with good usecase will surely have its price come up again and you make good profit from such coin. You just ensure that the coin you are going to invest into has good usecase and trustworthy team behind it, when the market recovers you will surely see the coin recover with it and as such you make profit
|
|
|
|
|
Ethereum price is extremely low but this is not the first time it is like this even though it didn't went lower than this last year but you will realise that it recovered and also it is going to also recover this year. The swinging in the market is the major attribute of the cryptocurrency market which is why it is said to be volatile. Be rest assured that it will surely bounce back
|
|
|
|
|
The first advice i always give to any newbie is that they should first learn the rudiments of cryptocurrency trading because the market is a volatile market and as such it can make you good money likewise it can make you loose good money too. When you learn from the experts in the field, this will help in minimizing the loss that you can incur during trading.
|
|
|
|
|
Even though i have not achieved what i intend to achieve in cryptocurrency, I still agree with the submission that cryptocurrency is one of the fastest ways to get rich provided you know all it takes to survive in the industry. i will advice you have proper knowledge of how the market works before venturing into it so that you wont make loss.
|
|
|
|
|
That the crypto market is in red doesnt mean that it is going out of existence. Crypto market will surely survive as it has been survivng in the past because this situation has been experienced in the past and it survived it and this time it is not going to be an exception
|
|
|
|
|
Holding unto cryptos for how long is determined by the movement in price. To me if i hold a crypto which i believe has great future prospect, when i see that the price has risen to the level i want, i will sell and keep my fiat. Some coin are not worth holding at all because they dont have good usecase and as such holding it is risky.
|
|
|
|
|
Show Posts
