Why Volatility Occurs in Crypto Markets
Assalamu Alaikum
How are you? By Allah's grace, I'm doing very well. The topic I will discuss today is cryptocurrency volatility. Cryptocurrencies are not created by any country state or government, therefore cryptocurrency prices do not follow any specific economic. Rather, the price volatility of cryptocurrencies is higher than normal, which can cause the price of cryptocurrencies to go up and down again.
The main reason behind this is that it is part of the new and unregulated market. The special feature of cryptocurrency is that nobody or any organization controls the management of cryptocurrency. We have seen in other currencies or money that the government controls or depends on the value of the currency but in case of cryptocurrencies this is not the case and this is a major reason why the value of cryptocurrencies fluctuates so much. Also we are currently seeing the use of cryptocurrencies increasing in volume, due to which the rate of volatility within cryptocurrencies is increasing. There can be many reasons for cryptocurrency prices to fluctuate, such as news, user sentiment, changes in market conditions, government policies, etc. These factors combine to make the price of cryptocurrencies in the crypto market exhibit volatility and may be affected by erratic factors. Volatility in the price of cryptocurrencies creates a difficult situation for managers and investors, therefore the price of cryptocurrencies fluctuates. In deciding to buy something with such crypto coins, the investor may think because if one wants to buy 1 bitcoin to profit in the future.
In that case, he would first have to wait for the price of Bitcoin to drop, which would lead to problems. Most of the time it takes a long time for the price of Bitcoin to drop, like a few days ago, Bitcoin was $72,000, which is currently in the $69,000 range. But a few days ago Bitcoin crossed its all-time high, which was a record. After all this when you buy bitcoins then you have to wait for bitcoins to pump to make bitcoin projects more profitable.
Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.
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You have written a very nice article about the instability of the crypto market, which I liked very much, thank you
Well the cryptocurrency market is quite a young market so that just like you have rightly pointed out leads or contribute greatly to the extreme volatility adding to it being unregulated, aside from that really any financial tradable instrument is subject to a little volatility too depending on the buying and selling pressure.
If something goes well in the developed markets, it's even better for us. Today you will very well share the post among us. Thank you very much for that. Enjoyed reading the post.
Why Volatility Occurs in Crypto Markets puts it nicely. For something to be good, there must be some downside. Likewise, this is also a disadvantage of the crypto market.