Volatility and its effect

[CryptoBuds]

When you enter the cryptocurrency market, either as an investor or as a trader, volatility is basically what you look for. An investor is someone who just buys and holds specific assets or cryptocurrencies like Bitcoin, while a trader is someone who buys and sells cryptocurrencies for a very short period of time to get very small percentages of profit out of each trade, however, both of these need volatility to help them achieve their goals and earn some money.

An investment from an investor would make no sense if the market doesn't move from where they've bought because they will only earn money if the market moves up, and when it moves up, it can move down as well. Similarly, a trader cannot make any trades if the market is completely stagnant.

Yes, volatility is trader's best friend, but it's not necessarily welcome by (long-term) investors. Low volatility doesn't mean the market does not move at all, it means there are no sharp and sudden movements, and instead of jumping up and down, price can go up slow but steady.
Example: gold is still considered a low-volatility market, but it's still popular among investors. There's nothing stopping Bitcoin behaving more like gold in the future, when block-rewards are lower and halvings have less impact on the supply.

LOL Gold is highly volatile. It creates price action that than you also cannot imagine but still goin into a clear direction going higher. There's even still an argument whether Gold or BTC is king. That's how most speculators describe Gold. Also most volatility in the marketplace was brought with some fundamental news that will affect commodities and currency, hence will also affect cryptocurrency. News releases also inject volatility in short term of BTC prices.

To be exact, gold is also very volatile, but its volatility is not as great as bitcoin. If anyone has ever traded gold in the foreign exchange market, they will understand that the fluctuations of gold there are not pleasant.

Gold or BTC, who will be king? Which aspect are you talking about? In terms of safety and capitalization, bitcoin cannot catch up with gold, but in terms of utility, bitcoin will somewhat surpass gold. To be fair, gold is a thousand-year-old asset recognized worldwide, while less than 5% of the world's population owns bitcoin. Basically, bitcoin has not yet been able to surpass gold.

News is always an indispensable part of the financial market, sometimes it will be news that drives the market, sometimes it is just an excuse to legitimize the market's price line.

[jostorres]

Volatility in the market is good for traders as they use the opportunity to make money from the market. An investors doesn't have any business been concerned about the volatility of the market because he isn't trading and only holding his investment up till it gives him or her profits then she can sell. Mostly when an individual invest in Bitcoin they already know when they want to sell and it's mostly during the next all time high of Bitcoin during the bull market.

Without volatility the market won't have been interesting and it wouldn't have had the opportunities it has to give traders profits everyday depending on how good the trader is in interpreting the charts and predicting correctly the movement of the market if it'll be up or down.

Why would an investor have no business with the volatility of an asset that they have made investments in? Would you be okay with Bitcoin being stable for years after investing all your money into it hoping that you will get huge profits after some years? I don't think so, that's why, whether someone is trading for the short term for small profits or investing and holding for the long term, volatility is important for both of these cases because there is no profit without volatility.

So, anyone who is involved in a financial market like the cryptocurrency market does care about the volatility of the assets they are trading or investing in because its the volatility that determines how much profit one can make from a certain investment that they are willing to make.

[Baofeng]

Volatility in the market is good for traders as they use the opportunity to make money from the market. An investors doesn't have any business been concerned about the volatility of the market because he isn't trading and only holding his investment up till it gives him or her profits then she can sell. Mostly when an individual invest in Bitcoin they already know when they want to sell and it's mostly during the next all time high of Bitcoin during the bull market.

Without volatility the market won't have been interesting and it wouldn't have had the opportunities it has to give traders profits everyday depending on how good the trader is in interpreting the charts and predicting correctly the movement of the market if it'll be up or down.

Why would an investor have no business with the volatility of an asset that they have made investments in? Would you be okay with Bitcoin being stable for years after investing all your money into it hoping that you will get huge profits after some years? I don't think so, that's why, whether someone is trading for the short term for small profits or investing and holding for the long term, volatility is important for both of these cases because there is no profit without volatility.

So, anyone who is involved in a financial market like the cryptocurrency market does care about the volatility of the assets they are trading or investing in because its the volatility that determines how much profit one can make from a certain investment that they are willing to make.

Yes, and that's why majority of us here are into crypto because we haven't seen this kind of assets that is very volatile, but yet in the long run, it will give us huge profits. And the design itself by Satoshi is very unique and controversial that's why many is against Bitcoin for that matter.

But for us, volatility might be difficult to understand in the beginning, but once we know how to play and manage risk or have a strategy to accumulate if we are going to be a long term investor, then we can treat it as a friend and love to see the ups and downs of the market.

[KingsDen]

The significance of volatility is that an asset is risky to own on any particular day, Its value could significantly increase or decrease.

When people talk about volatility as it concerns bitcoin and cryptocurrency, they often dwell on the disadvantages side of the divide which only talks about how an investor could lose their investment value should the market go the reddish side. Hardly we talk about the bullish part of it, but each and everyone of us has invariably benefited from bitcoin bullish trend.
That is one part, another angle I wish to emphasis is that volatility is also an advantage, because day traders benefit from the movement of the coins. If the coins don't move, there will not be trading.
Op, don't you think volatility is what we need more to achieve bull run, why think the reverse?

[Nrcewker]

Volatility is what makes an investor and also trader hopeful but sometimes regretfull because it has a two way effect and as it's good and beneficial for you as a trader that's the same way it's aslo dreadful when the volatility doesn't favour you. For bitcoin volatility is what made people like us who missed the early time bitcoin started to actually be able to buy now because of the constant fluctuation of price.

Volatility really plays an important role in each and every crypto market. For this volatility, the traders make profits and for this volatility only the traders make heavy losses also. Basically the volatility plays an important role in manipulating the market from one end to another. If a trader underestimates the volatility offered by the market, then definitely he will make losses in long term. You need to analyse the risk involved along with volatility of the coin and then only trade.

[Asuspawer09]

In the foreign currency market, I recently experienced the BTC/USD volatility effect, which prompted me to investigate what makes the pair (bitcoin) so volatile.
Volatility is the evaluation of how much value of a financial asset fluctuate on a particular time.
Averagely, Bitcoin volatility ranges between 1.68%_4.54%, where Wednesday is the most volatile day compare to other days and Saturday which is the least volatile days.
The significance of volatility is that an asset is risky to own on any particular day, Its value could significantly increase or decrease.
There are a number of causes for bitcoin's historically erratic price behaviour. By knowing the elements that affect its market value one can choose if to invest in it, trade it, or keep following its advancements.
Bitcoin's price; just as other commodities, stocks, other products and assets rely upon supply and demand.
As it is an asset which traders and investors have swiftly adopted, its value is heavily influenced by opinion about price changes.
Investors concern are also influenced by media sources, influencers, industry titans with strong opinions, and popular cryptocurrency supporters, which causes price volatility.
Factors that create bitcoin volatility.
1. Demand and Supply
2. Investors' and user sentiment
3. Government regulation
4. Media blitz

• Bitcoin demand and supply
As much as any other aspect, demand and supply determine the pricing of the majority of asset. The quantity of coins in spread and the price at which individuals are prepared to pay have a significant impact on the value of bitcoin. The total quota of coins in the cryptocurrency is set at 21 million by design; when the circulating supply approaches this number, values are projected to increase. Source: www.c[Suspicious link removed]m
• Bitcoin investors reaction
Since the quantity of bitcoin; the most popular cryptocurrency is getting more scarce, demand for it is rising.
• Government policy also influenced bitcoin volatility
• News/Media outlets
In the news, or media, we see different analysis from different “experts” predicting the future movement of Bitcoin, with that action, holders tend to hold more or even increase their shares.

You definitely make your point here, I mean there are just so many things that are affecting the market price of Bitcoin, and it's just the nature of Bitcoin and cryptocurrency, we can't really do anything about that because even though there are a lot of disadvantages on being a volatile market it's still a lot of advantages to the point where it makes the cryptocurrency unique to other investments and assets like stock, real states, etc.

I mean if Bitcoin or other cryptocurrency wasn't volatile like what it is we weren't really going to make a good profit on it, probably those Bitcoin and cryptocurrency millionaires are going to be rich after a few more years like the stock market since most of the time it would take many years before they could gather momentum and skyrocket its market price. I mean we could just compare it to the stock market with just a much faster movement, But we can't really control this kind of thing since it is cryptocurrency nature what we can do is adjust to how we can make a profit on it, probably most of the investors are already doing DCA in order to accumulate cryptocurrency and in the end still make a good amount of profit, bad side probably is there are always going to be losers since you're going to lose money if you didn't sell at the top, there where only a few investors that is going to be lucky to sell at the peak.

[ShowOff]

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I mean if Bitcoin or other cryptocurrency wasn't volatile like what it is we weren't really going to make a good profit on it, probably those Bitcoin and cryptocurrency millionaires are going to be rich after a few more years like the stock market since most of the time it would take many years before they could gather momentum and skyrocket its market price. I mean we could just compare it to the stock market with just a much faster movement, But we can't really control this kind of thing since it is cryptocurrency nature what we can do is adjust to how we can make a profit on it, probably most of the investors are already doing DCA in order to accumulate cryptocurrency and in the end still make a good amount of profit, bad side probably is there are always going to be losers since you're going to lose money if you didn't sell at the top, there where only a few investors that is going to be lucky to sell at the peak.

Volatility is expected because bitcoin is not a stable coin pegged to the USD. Bitcoin is traded freely without anyone's intervention, but if its price volatility didn't really exist then it's clear the average person would never want to trade it or invest in it. For me, price volatility is mandatory for all crypto assets, even USDT always fluctuates and never has completely stable value.

Moreover, price volatility is not a threat to the future of crypto, especially bitcoin. However, the impact of this volatility must be minimized so that investors and trader do not experience losses over time.

[flyingcarpet]

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I mean if Bitcoin or other cryptocurrency wasn't volatile like what it is we weren't really going to make a good profit on it, probably those Bitcoin and cryptocurrency millionaires are going to be rich after a few more years like the stock market since most of the time it would take many years before they could gather momentum and skyrocket its market price. I mean we could just compare it to the stock market with just a much faster movement, But we can't really control this kind of thing since it is cryptocurrency nature what we can do is adjust to how we can make a profit on it, probably most of the investors are already doing DCA in order to accumulate cryptocurrency and in the end still make a good amount of profit, bad side probably is there are always going to be losers since you're going to lose money if you didn't sell at the top, there where only a few investors that is going to be lucky to sell at the peak.

Volatility is expected because bitcoin is not a stable coin pegged to the USD. Bitcoin is traded freely without anyone's intervention, but if its price volatility didn't really exist then it's clear the average person would never want to trade it or invest in it. For me, price volatility is mandatory for all crypto assets, even USDT always fluctuates and never has completely stable value.

Moreover, price volatility is not a threat to the future of crypto, especially bitcoin. However, the impact of this volatility must be minimized so that investors and trader do not experience losses over time.

Many people invest in Bitcoin because Bitcoin has volatility. Because volatility gives the investor the chance to make a profit. It also has risks, but volatility makes investing more attractive. Maybe we will see a time in 50 years when there will be no volatility in Bitcoin, but Bitcoin needs volatility right now. Volatility also brings new investors.

Some of the people who invest want to make a profit in the short term. Not all of them, but still a significant number of them are short-term investors. Volatility allows these investors to get what they want.

[lixer]

Volatility is expected because bitcoin is not a stable coin pegged to the USD. Bitcoin is traded freely without anyone's intervention, but if its price volatility didn't really exist then it's clear the average person would never want to trade it or invest in it. For me, price volatility is mandatory for all crypto assets, even USDT always fluctuates and never has completely stable value.

Moreover, price volatility is not a threat to the future of crypto, especially bitcoin. However, the impact of this volatility must be minimized so that investors and trader do not experience losses over time.

How do you expect the impact of the volatility to be controlled or minimized? That might be possible if an asset or a cryptocurrency is centralized and the control is in the hands of the creators or maybe the holders which is barely the case with Bitcoin or a lot of other cryptocurrencies because the amount of volatility depends on the demand and supply rule and we are not really able to control the demand or the supply unless a cryptocurrency has a supply that can be increased or decreased by the developers which makes it centralized, somehow.

And the main thing is, as you said, the volatility isn't really a threat for cryptocurrencies but it's the reason why they are so popular in the world today. Imagine if Bitcoin wasn't volatile from the beginning, and the price didn't increase at all, would it be able to reach where it is today? I don't think so.

[Bako97]

I think "no control" is something that matters a lot in this regards.

I couldn't agree with you more; without control of number of sells or purchase, they won't be a limitation to how an item can rise or fall.


In my understanding the factors and the volatility are directly dependent, anything can happen.
[/quote]

The factors are directly dependant in the sense that it what triggers the choice of marketers(sellers/buyers) and thus, causes the fluctuation in the market.

[Bako97]

Volatility is the evaluation of how much value of a financial asset fluctuate on a particular time.
Averagely, Bitcoin volatility ranges between 1.68%_4.54%, where Wednesday is the most volatile day compare to other days and Saturday which is the least volatile days.

How true these words? I mean, what makes Bitcoin more volatile on Wednesday and less volatile on Saturday? This doesn't make sense since bitcoin exchanges are not closed 7 days a week.

Yes, this may be true in the forex exchanges, because it is closed on Saturday and Sunday. As for the cryptocurrency exchanges, I do not think that this is accurate.

These are applied to forex exchange market, particularly BTC/USD, where the volatility and signals varies in some days.

[Felicity_Tide]

How do you expect the impact of the volatility to be controlled or minimized? That might be possible if an asset or a cryptocurrency is centralized and the control is in the hands of the creators or maybe the holders which is barely the case with Bitcoin or a lot of other cryptocurrencies because the amount of volatility depends on the demand and supply rule and we are not really able to control the demand or the supply unless a cryptocurrency has a supply that can be increased or decreased by the developers which makes it centralized, somehow.

This is clearly why Bitcoin would always be above the others. Just imagine the frustration that comes when you buy any project outside Bitcoin and fail to make tangible profit for years due to how slow that particular crypto market is due to centralize influence and unimaginable number of supply.

Bitcoin on the other hand is driving by the demand of the people as you've stated, which makes it very impressive (whether good or bad), i.e price changes as time counts.

And the main thing is, as you said, the volatility isn't really a threat for cryptocurrencies but it's the reason why they are so popular in the world today. Imagine if Bitcoin wasn't volatile from the beginning, and the price didn't increase at all, would it be able to reach where it is today? I don't think so.

Volatility is clearly why we make profits and losses , and profit and loss are clearly part of economics. If either of them remain constants for a very long time just like how so many altcoin behaves, it certainly leads to total failure at the end of the day for investors. This is unlike Bitcoin where profit and loss occurs at a decent interval making it best I must say.

[Bako97]

The total quota of coins in the cryptocurrency is set at 21 million by design; when the circulating supply approaches this number, values are projected to increase. Source: www.c[Suspicious link removed]m

Bitcoin's maximum supply is 21 million. Some other cryptocurrencies have their hard cap, examples are Monero (XMR) and Dash with 18.9 million, and XRP and Tron (TRX) with a supply limit of 100 billion. Some other cryptos have unlimited supply limits.

Something like this is not happening for the first time, bitcoin is known to be a highly volatile cryptocurrency and what we have to consider most is the market supply and demand for bitcoin, the value of bitcoin if we are to consider that one as well isn't stable in recent days and the exchange rate is increasing more in value with BTC/USD, this is another good reason why holding bitcoin is more valuable than any form of currency because you will miss out any exchange rate opportunity than when you're holding fiat currency alone.

Bitcoin is the most stable cryptocurrency. Other cryptocurrencies are highly volatile because their prices can go very high in a few minutes and nosedive in another few minutes. But we hardly experience such with Bitcoin. Bitcoin is when more stable than some fiat currencies and even my country's currency is more volatile than Bitcoin. I can say that Bitcoin is quasi-volatile

You are quite right about bitcoin been the most stable cryptocurrency, but in exchange with other currencies, it can be highly volatile, with price going from 0.1_0.5 within a blink of an eye.

[Mahanton]

Volatility is expected because bitcoin is not a stable coin pegged to the USD. Bitcoin is traded freely without anyone's intervention, but if its price volatility didn't really exist then it's clear the average person would never want to trade it or invest in it. For me, price volatility is mandatory for all crypto assets, even USDT always fluctuates and never has completely stable value.

Moreover, price volatility is not a threat to the future of crypto, especially bitcoin. However, the impact of this volatility must be minimized so that investors and trader do not experience losses over time.

How do you expect the impact of the volatility to be controlled or minimized? That might be possible if an asset or a cryptocurrency is centralized and the control is in the hands of the creators or maybe the holders which is barely the case with Bitcoin or a lot of other cryptocurrencies because the amount of volatility depends on the demand and supply rule and we are not really able to control the demand or the supply unless a cryptocurrency has a supply that can be increased or decreased by the developers which makes it centralized, somehow.

And the main thing is, as you said, the volatility isn't really a threat for cryptocurrencies but it's the reason why they are so popular in the world today. Imagine if Bitcoin wasn't volatile from the beginning, and the price didn't increase at all, would it be able to reach where it is today? I don't think so.

One of the main things on why crypto market had been that mainly supported or been backed by the community is just because it did really be able to built up that kind of confidence that this isnt something a market which could really be that easily be controlled or manipulated. Well, we do know that some part of might be but in general there's no way that only a few entities would be able to make out that huge effect into this space.

If they have been able to have such control then they wont really be trying out their very best on trying to get rid of it. Cryptocurrencies are indeed revolutionary thing that had been created.
Market makers are the ones who do make out such volatility or movement into its price plus having those other factors on which considered out to be also the reason. Effect?
It would really be pertaining mostly or considering about making profits or loses into those people who had been able to get along with those movements and decided to take up some ride
out of it. Outcomes will really be determining on how well you have done such thing.

[tengui]

news or issue is the main reason why bitcoin prices fluctuate so much, especially news about exchange hacks and ETF. this is the reason why investing in bitcoin is a high risk investment. However, this also has a positive impact, namely that it can provide profits in a faster time because the price of Bitcoin rises and falls very quickly. However if you invest long term you don't need to worry too much about the very fluctuating price of Bitcoin.

[NewRanger]

Behind it all I believe investors also have a tagline 'buy based on rumors, sell facts' and vice versa. Exactly the four are the most dominant components and are enough to affect market sentiment either positive or negative so that it more or less affects the price performance of BTC, but if the news is good, everything will be fine.

Well, if we see suddenly the price of bitcoin dropping or rising drastically in the near future use that concept as well. and This is why we should study and understand how it works in the market. Many traders profit when using this strategy.