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.

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[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.