Why is the spot share price of certain cryptocurrencies more volatile than others?
Nguyễn Công MạnhDec 16, 2021 · 3 years ago1 answers
What factors contribute to the higher volatility of the spot share price for some cryptocurrencies compared to others?
1 answers
- Dec 16, 2021 · 3 years agoThe spot share price of certain cryptocurrencies can be more volatile than others due to various reasons. One of the main factors is the relatively low trading volume of these cryptocurrencies. When there are fewer buyers and sellers in the market, it becomes easier for large trades to impact the price significantly. Additionally, the lack of regulatory oversight and market manipulation can contribute to increased volatility. Cryptocurrencies with smaller market capitalization are more susceptible to price manipulation, as a few large trades can have a disproportionate effect on the price. Moreover, the speculative nature of the cryptocurrency market attracts traders who are more inclined towards short-term gains, leading to higher volatility. It's worth noting that some cryptocurrencies, like Bitcoin and Ethereum, have gained wider acceptance and have relatively lower volatility due to their larger market capitalization and established reputation.
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