@internetofvalue
8 months ago

Why do cryptocurrencies have so much market volatility?

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I think a large part of the volatility, is due to the thinly traded markets. If you then consider how many different exchanges, that particular cryptocurrency trades it's amazing. This does not even include the peer to peer exchanges.

On top all that, you would then factor in, the geographic regulations that influence the market. In some countries you have failing economies, so people there, are trying to convert their saving in a hurry. This moves the market.

Then you have the financial regulations in some countries that also influence the volatility.
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1 comment
Full of Scams, Almost.

You’d be naive to believe the cryptocurrency market is free of bad actors. After countless exchange hacks and fraudulent ICO schemes,HYIPs, these bad actors have unfortunately had a big impact on overall market trust. Investors need to know their money is safe and, in the minds of many, that just can’t be guaranteed.

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Lack of Fundamental Valuation

One massive difference between the digital asset market and the equities (read: traditional) market is the fundamentals that determine the valuation of an asset. If you were to ask a top equities fund manager how they determine a stock’s value, they would likely be able to point to finite numbers.
Factors like EBITA, company debt profile, and C-suite executive movements give at least some indication to where a company’s future lies. Very little of this exists in the crypto market.

Constantly Changing Regulatory Outlook
The regulatory bodies that govern fiscal policy relating to cryptocurrency are having great difficulty in determining appropriate rules to dictate the industry. They must carefully walk the line between over and under-regulating. Too little oversight and investors will be taken advantage of by malicious parties. Too much intervention and blockchain innovation is stifled.
The result of this caution is regulatory confusion, legal “grey areas”, and frequent flip-flopping on nation-wide bans.


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My Opinions

It's because there is no Real backing for Crypos and People fear a lot. So there is constant Withdrawal and Investing in other Crypto Assets.

Some of the Crypto are just trading at Overprice. It's like gambling when you invest in these.

Only small population are trying to use Crypto,like techies and rebels about Taxing System.

No regulation.
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I would say that's because the market cap of the whole crypto world is rather small. I mean, it's just over $100 billion dollars. It's very easy to turn the market your way if you have enough money. And there are people with A LOT of money that wants to earn even more so they turn the market their way.
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Crypto market runs a lot on speculation. It is more or less equivalent to some drama. False alarms are main source of dumps. Whales dump to create panic. The amount of crypto in people's hands is not balanced. There are a some big players and rest of us are just sheep.
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Because cryptocurrency market is operating on a global scale as a free market 24X7. So there's no limit on manifestation of mass human behavior, whether it is FOMO (Fear of Missing Out) or FUD (Fear Uncertainty Doubt).
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Crypto is an international tradable currency,so I think a third party's involvement is heavenly impacted Crypto market,and You’d be naive to believe the cryptocurrency market is free of bad actors. After countless exchange hacks and fraudulent ICO schemes,HYIPs, these bad actors have unfortunately had a big impact on overall market trust
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