Topic: Volatility and its effect (Read 872 times)

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

Maybe that's the problem. People think they have to react to every change in price, by either buying or selling. This obviously only escalates volatility even further.
The problem with Bitcoin is it doesn't have a fundamental or intrinsic value. In other words, it's impossible to say whether Bitcoin is over or underpriced at its current price, which makes it way more prone to wild swings than any traditional asset.

Volatility can play both good and bad roles but it depends on us that how move according to it like if there is increase and decrease so we have to take decision of buying and selling according to it but if decrease in price persists for longer time then it can be unhealthy for investors.

I was compelled to reply to your post due to many errors I found and I hope this corrects it.

Volatility, Liquidity and Market participation work hand-in-hand to define the condition at which the market moves. With low liquidity and market participation, the market could be very volatile and could also be manipulated as well, which is why we see some spikes and haphazard movements at times when the market is speedy. This could cause some unrest and whipsaws as well, conditions that are not good for trading. However, it's often difficult for the market to be manipulated when the liquidity and participation are high. This is when you see the market smoothly sailing towards a definitive trend without much of the dangerous moves.

Mind you, any market could experience high or thin liquidity, gold is not an exception, and when it comes to volatility in the market, gold is one of the assets on the high side, it's volatile.

Gold obviously has less risk than Bitcoin for the money invested in it due to the level of its volatility which is a lot lower than Bitcoin's volatility. And gold barely loses value over time but it just keeps getting more and more expensive as we move into the future, whereas Bitcoin is volatile and moves in both directions equally. In a total Bitcoin cycle, it has a bull market and a bear market, and we get to see both a very low price and then a very high price every cycle.

Volatility can play both good and bad roles but it depends on us that how move according to it like if there is increase and decrease so we have to take decision of buying and selling according to it but if decrease in price persists for longer time then it can be unhealthy for investors.

Volatility is beneficial for both trader and investor but due to Volatility short term traders are in more risk due to regular changes occur in value. People consider gold as a safe investment because the changes are not so sudden and huge down like that of bitcoin.

One disadvantage of volatility is that someone wants to multiply income quickly so when market decreases due to volatility then there is a chance of losing your hope as well as money.

Gold obviously has less risk than Bitcoin for the money invested in it due to the level of its volatility which is a lot lower than Bitcoin's volatility. And gold barely loses value over time but it just keeps getting more and more expensive as we move into the future, whereas Bitcoin is volatile and moves in both directions equally. In a total Bitcoin cycle, it has a bull market and a bear market, and we get to see both a very low price and then a very high price every cycle.

However, as you said, the higher the risk, the higher the potential for greater rewards. So, people who want to get a lot of profit in a very short span of time, tend to go for investing in Bitcoin, and those who are okay with stable and long-term profits, prefer investing their money into gold.

If judged fairly, bitcoin cannot be compared to gold or other tangible assets in terms of safety. An asset that is not yet widely accepted and is only 15 years old, while gold is over a thousand years old and recognized worldwide. Obviously bitcoin is less secure than gold, we need to accept that and that's why people trust gold more than bitcoin. But the opportunity is always covered by the risk, so those who are willing to take the risk will have a higher chance of getting the reward.

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 can play both good and bad roles but it depends on us that how move according to it like if there is increase and decrease so we have to take decision of buying and selling according to it but if decrease in price persists for longer time then it can be unhealthy for investors.