We can observe this year that cryptocurrencies tend to move up and down on a daily basis, even by 15 percent of the value. These demand shifts are regarded as volatilities. Even instead what if … This is completely normal and sudden changes are one of the features of the cryptocurrencies that allow you to make good profits?
First of all, the cryptocurrencies recently made it to the mainstream, so all the news and rumors about them are “hot.” We observe huge price movements after every statement by government officials about possibly regulating or banning the cryptocurrency market. Visit our website to get free information about what-is-ethereum-an-explanation-for-beginners
Second, the essence of cryptocurrencies is more like a “value store” (like gold in the past)-many investors see it as a stock-backed investment option, physical assets such as gold and fiat (traditional) currencies. The transfer speed also influences cryptocurrency volatility. The transfer takes even a few seconds (up to one minute) with the fastest ones, which makes them an excellent asset for short-term trading, if there is currently no good trend on other asset types.
What everyone can keep in mind-the pace always goes with crypto currency lifespan patterns. Although patterns on daily markets can last months or even years-in just days or hours this takes place here.
This brings us to the next level-although we are thinking about a market worth hundreds of billions of US dollars, it is still very small compared to the average volume of trading compared to the traditional currency or stock market. Thus a single investor making 100 million trades on the stock market will not cause a huge price change, but this is a large and visible trade on the size of the crypto currency market.
Since cryptocurrencies are digital assets, they are subject to technical and software updates of cryptocurrencies features or expanding blockchain collaboration, making it more attractive to potential investors (such as SegWit activation, which basically caused Bitcoin ‘s value to double).
Combined these elements are the reasons we observe such huge price changes in cryptocurrencies prices within a few hours , days, weeks etc.