reasons why the cryptocurrency market is so volatile apparently this is an expert take oh really well anyone's an expert today guys last year was the least of volatile in stock market history of decades and traders whose historically have profit of off price swings have given their jobs to high-frequency trading algorithms run by computers that act on the millisecond on Wall Street humans are the commodity being replaced by machines and yet for years of volatility in the stock market can be covered in a month the pricing movements in the crypto markets veteran cryptocurrency investors that know this to be a fact but what exactly but exactly why is this asset class more volatile than any other liquid asset in the market I'll give you the short answer guys you just need strong hands but here we go number one no intrinsic value oh really despite the company size evaluations crypto currencies don't sell a product earn revenue or employ thousands of people they generally don't return dividends and just a tiny amount of the total value of the currency goes into evolving it because of this it is hard to value how do we know if it is overbought or oversold when is it a good value or overpriced without any fundamentals to base this information off of we can only rely on market sentiment which often is dictated by the media that makes money on the or ship
lack of regulatory oversight cryptocurrency is a worldwide phenomenon and while governments are clamping down on the industry regulation is still in the early days Yahoo and that's a good win for us guys such limited regulation allows for market manipulation which in turn introduces volatility and discouraged institutional investment since large funds have no assurances that their capital truly secure or at least protected against such bad actors maybe the large whales in the institutions are the bad actors that we don't want involved in cryptocurrency
lack of institutional capital while it is undeniable that some pretty impressive venture capital companies hedge funds and high net worth individuals are both fans and of n investors in crypto as a segment most of the institutional capital is still on the sidelines as of this writing we have a limited momentum on the crypto ETF or a mutual fund most banking heads admit there's some validity in the space but if yet to commit a significant capital or participation publicly that's not true we have seen many large banks who have been found out to have hoards of Bitcoin stores or cryptocurrency stores guys institutional capital comes from a variety of forms such as large trading desk that has the potential to introduce efficiency and softened market volatility or a mutual fund of buying on behalf of their investors for the long term
in order books crypto investors are taught to never keep coins on an exchange which can be hacked as a result most of the trading supply is not on an exchange order book but in off exchange at wallets I don't know if that's true I remember I remember reading an article a couple years ago that still the vast majority of coinage is still held up in exchanges not private or offline wallets it's still a long adoption curve to move people off of exchanges to heart to hardware wallets because the learning curve is so high so I don't know if I necessarily agree with this I mean might have to do some research and look up the sources for this particular data but anyway in contrast nearly all the tradable stock of a publicly listed company is transacted on a single exchange a large market order can eat into the exchanges order book on the way up or down causing something called a slippage we saw an exaggerated example of this in GTA X ether flash crash but less extreme versions of this occur on a daily basis because of the capacity for large traders to move the market in either direction and employ taxes to encourage this volatility goes up long term versus short term
if you invest into something that you don't spec to take out until you're 60 years old then you're probably less concerned about its daily or even yearly price movements thus you're less likely to trade it like me crypto currencies for the most part can't be bought in retirement accounts and are generally inaccessible to retail brokers and financial advisors so an entire ecosystem of investors is left out this leaves us with early adopters that are comfortable with the technology hurdle of dealing with wallets and web-based trading platforms the same ones that are refreshing black folio every 10 minutes high-fiving each other when the coins moon or sweating in panic when the price drops that's only we can see guys that's none of the people in the crypto nation these are the same kind of people who don't have the discipline to just buy and huddle for the long run and therefore contribute to the panic cells or FOMO buys we need to mature the investors in the crypto currency market guys we need to add mature them so they don't get all up in that FOMO
herd mentality the lemmings are true crypto is largely a phenomenon of Millennials who distrust government our early adopters in tech and they've been mainly shunned out of investment wins earned in the last decade of rising real estate in stock market prices but most Millennials do not have long term investment experience of their more mature and generational counterparts they also tend to have less disposable income as a result of historically poor job economies and less time in the workforce added with the fact that they have useless degrees in Liberal Arts and generally end up spending most of their money on cool things like iPhones and Apple products which have no real let's just say the value isn't there if you want to buy last generation technology at three times the price you'll buy an Apple tank on sale think about it guys this combination of factors results in a few things and appetite for risk in hopes of landing a windfall of cash and utilizing a larger share of whatever capital they have to invest in risky instruments including purchasing such investments on credit not a good idea when the market goes down this is money that this is money that will literally that they literally cannot afford to lose so we'll dump at the first sign of trouble since this is a reactionary behavior they will generally lose money we're getting out of the market when the market starts surging up they will have to buy with the money they don't have it's true as a group this appears to be coordinated and mass but it is just the motivations of many single entities that propagate into a herd mentality if you pair this behavior with the swingers caused by large whales in a thinly traded market you have a synergistic effect synergies when will volatility decrease while over time we can expect more regulation a greater diversity of investors and a more mature outlook on the crypto market we can also expect higher utility value as merchants find more accessible ways of accepting cryptocurrency and the technology behind transactions also improves while volatility may decrease we can also expect the gradual but steady surge in value of the cryptocurrency market as a whole just as stock market has given way to long term Hodler so tube with the cryptocurrency markets at the very least it appears to be something that is going to be here for the long run well I couldn't agree with this author any more the cryptocurrency market my friends is going to be here for the long run as we see the maturity of weak hand ha dollars of sorts and as we see the technology being used and utilized in more more industries and more companies day by day we will continue to see the rise of cryptocurrency in the overall marketplace so this is a good thing so I'll tell you my results of reading through this it's very simple a strong hand is what is required and you should probably check out the Bitcoin dot pub for more information on how to learn to be a long term modeler and to invest wisely my friends is this why the markets so volatile or is it just the fact that this is just a new market in which people aren't constantly experimenting and no one knows really what the hell is going on
