I am a newbie when it comes to cryptocurrency, I only started to dig about it just this year June 2020 to be exact but the willingness to learn about it is really a desire for me. I always want to learn about it, learning how digital assets works is worth spending time. We are now in a digital world where technological advancement is rising, we should always seek time to learn from it for our own good and replace ignorance into a learner. As a learner, I also want to share what I learned from it. Mostly small traders or holders of certain assets is afraid or anxious about the volatility of the value of the assets on the market, it is important to know the reason why assets values increase and decrease from time to time.
Most of us know that cryptocurrency is highly volatile, which means the price values of the assets will change from time to time sometimes high and sometimes low. But what is really the meaning of volatility?
Volatility means the degree of variation of a trading price over time. In other words, volatility indicates the amount of uncertainty about the size change of the assets values. The higher an asset spread of values means the higher volatility of it. To read more about volatility you read it here,https://cointelegraph.com/tags/volatility
I am really curious about the changes of values in BCH or any cryptocurrencies that is why I do some research to answer my questions behind those changes.
Factors that affect the Volatility of Crypto Assets
Supply and demand- Cryptocurrency assets have limitations, unlike the fiat currency where banks and governments can print out money at any time depending on economic inflations. Crypto assets have a market cap, when the demand is high the value increases because the supply is limited. The cryptocurrency rate depends on the balance of supply and demand – this is a market law.
Regulation of the cryptocurrency- One of the most important factors at the moment, which can seriously affect the situation in the cryptocurrency market. Both the news about the prohibition of a particular digital currency or the industry as a whole, and the recognition of the assets as a means of payment influence the rate. As we all know, some countries do not accept cryptocurrency they prohibit using digital assets.
Infrastructure news. Everything that makes the assets closer and its use more easily affects market quotes. The emergence of crypto ATMs, collaboration with the largest payment systems, support of bitcoin payments by the largest retailers or cafes, and restaurants – this kind of information has a great effect on market dynamics and price growth. (For example, the happenings on BCH now that the upgrade is nearly coming in November the price of BCH did not rise up again just like before, it hits $320.)
Hackers attack - Reports about hack will surely lead to price down in an instant The market reacts instantly and the intensity depends on the site that was attacked.
Listing of coins in top exchange -The ranking of coins affects the price value. Listing of cryptocurrencies, as well as delisting, inevitably causes a change in rate. Information that any new cryptocurrency will be added to the exchange heightens the interest in it. In most cases, adding a cryptocurrency to the exchange leads to an increase in popularity. Listing is rather a positive event that can lead to an increase in price. Delisting is almost always a decrease in price.
News in the media- The volatility of the cryptocurrency rate is largely based on the hype that constantly keeps up the interest. A sharp drop in the rate can be influenced both by the post on a social network and an intentional utterance by a well-known personality of the cryptocurrency world. In the field of cryptocurrency, the news really has a significant influence on the situation on the market.
Volatility is one of the reasons why some people do not want to invest in cryptocurrency, they are anxious about the sudden changes in its price. They are afraid that the price will constantly drop that will result in a great loss of money rather than gains from it.
Some of my fellow countrymen here on read.cash usually converts their BCH earnings right away because of this volatility, as for me I also lose money because of it when the price value of BCH drops from $320 up to its current price values now.
Just yesterday the BCH price also drops affected by the withdrawal of BitMEX trading of $243 million dollars worth of Bitcoins because they were allegedly accused of money laundering. To read more about the issues here is the link.
Money Laundering Violations
BitMEX withdraw $243 million dollars of Bitcoin
https://decrypt.co/43667/bitmex-traders-withdrew-243-million-of-bitcoin-in-one-hour
It is important to understand that terminologies in cryptocurrencies so we will not be like an ignorant who knows nothing, make use of your stay here to learn something.
Sources:
https://cointelegraph.com/tags/volatility
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That's onenof the disadvantage of cryptocurrency talaga, pabago bagong price, pero mas madami pa din naman syang advantage. Ang ganda sana nito if naka tyamba ka na biglang taas ang value ng isang crypto tapos may nakaimbak kalang na btc sa wallet mo, ang heaven non