15-19. соединила подошве вязании крючком. Петлями по подошве пакетов нитью с. Связалаплотных вид на 20 л.
Different individuals possess a different level of risk tolerance, and this affects their choice of investments. For instance, a year-old retired pensioner would probably have a very low-risk tolerance since their main priority would be to preserve their wealth. The types of investments they would be looking at would be pension funds, mutual funds, low-yielding government bonds or highly-stable blue-chip stocks that pay-out a sizable dividend income.
Alternatively, a year-old fresh from university would probably have higher risk tolerance and would consider investing in riskier investments that include cryptocurrencies and technology stocks. It must be mentioned that the level of risks that one chooses to undertake is highly correlated to the potential returns that he would acquire.
In other words, a higher risk investment is associated with a greater probability of generating higher returns while a low-risk investment would yield a smaller rate of returns. This is called the risk-return trade-off.
Cryptocurrencies are the riskiest asset that you can put your hard-earned money on; it can give you a significant rate of returns but conversely, you must be prepared for the possibility of a huge loss, given the extreme volatility of cryptocurrency prices. There are multiple reasons that contribute to the highly volatile and unstable environment. A young market backed by a new technology would be much more volatile than traditional investments that are mature and have been time-tested.
Just as when the internet was a revolutionary back in the s and Internet-related companies were generating significant rates of returns, the cryptocurrency market is currently in a similar cycle. New technologies take time to be perfected and adopted by the general masses, and there is a high risk of failure since there are many things that can go wrong. That is why they possess a high risk-return trade-off. Liquidity refers to the ease of buying or selling an asset in the open market. A market with a high volume of transactions with a vibrant number of market participants buyers and sellers is known as a highly liquid market.
Unfortunately, the relative infancy of the cryptocurrency market means that its liquidity is currently very low. Looking at the trading pairs of many coins, you can see that the daily trading volume is nothing as compared to the values of other traditional investments such as the stock markets. A low liquidity market — such as the cryptocurrency market — is easily susceptible to sudden and aggressive fluctuations in prices, since a single large order can move the markets and send the price soaring or crash in an instant.
This is because there is an insufficient number of market participants and orders in the market to buffer against potentially large orders that can move the markets. Additionally, market manipulation is extremely rife in a low- liquidity environment. The relatively low liquidity of the cryptocurrency market makes it a hotbed for volatile price swings.
The cryptocurrency market is largely unregulated due to the complexity and the difficulty in regulating an open-source and decentralized technology. With an absence of regulations , there is an influx of bad actors that would manipulate the markets since there is no supervision.
There have been frequent numerous reports on the entities explicitly manipulating the cryptocurrency markets. They can range from a coordinated pump-and-dump scheme by a collective to the manipulation of trading volume by cryptocurrency exchanges. Market manipulation makes the general market unstable and highly volatile since the large orders created by these entities with the intent of manipulation would significantly cause sharp fluctuations in the market.
This will induce panic and will lead to even more chaos and volatility, given that the cryptocurrency market is easily moved by news and sentiments. In an infant market with no regulations , the only thing driving the values of cryptocurrencies is speculation. Normally, the value of any asset is dependent on its utility and adoption. At the moment, speculation is rife since it is extremely difficult — almost impossible — to quantify the values of any cryptocurrency based on traditional fundamental analysis.
Therefore, the best way to value any coin or token is to speculatively bet on the future use cases, adoption and traction of a coin instead of fundamental metrics which are currently unquantifiable. The cryptocurrency has often been seen as a hotbed for speculation, which induces market instability. This creates an environment filled with tremendous risks. See more: Dangers in Cryptocurrency Investing.
Volatility means different things to different people in the markets. A risk-averse individual would avoid high-volatility investments since they are more concerned about stability and preserving their wealth. Those who participate in the cryptocurrency market are considered to be risk-takers. These statistics prove that young millennials are more attracted to high-risk investments such as cryptocurrencies, as compared to their older counterparts.
A more volatile market generates bigger price moves, which in turn may provide greater opportunities to earn a tremendous rate of returns on investments. Lesser volatility equates to lesser price movements and therefore, a lower probability of earning the desired returns. The ability to potentially make significant amounts of money is perhaps the biggest draw for many investing in cryptocurrencies. It is so because cryptocurrencies, including Bitcoin, cannot be controlled and hence would continue to trade in the free markets.
Free markets — In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.
That is why I think Bitcoin and other cryptocurrencies will be volatile until it hits its saturation market-cap which no one can safely predict. You may see the current volatility here if you wish. And if you are still interested, start getting accustomed to such volatility for the future and never invest more than what you can afford to lose. That is all from my side in this article. In upcoming posts, I will share my thoughts and research on what actually gives Bitcoin value.
But for now, I would love to hear your experience in this crazy volatile crypto world. Also, I would love to know: How are you dealing with this volatility? Do you have any suggestion for the CoinSutra Community? Let us know your thoughts and findings in the comments section below! He has a background in both finance and technology and holds professional qualifications in Information technology.
I mitigate the volatility by diversifying. IMO bitcoin is not a great investment anymore. If it climbs through the stratosphere to k, then you only got a 5x return. Sure, that would have been an unbelievably phenomenal return 10 years ago, but there are far better investments now. Doing your research, and spreading your investment across as many of the best cryptos even BTC that you can is the way to go.
Bitcoin will eventually fail because of its too sky-high high fees. And even in lakhs if it hits over a million dollar within a few years. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.
Notify me of new posts by email. This site uses Akismet to reduce spam. Learn how your comment data is processed. CoinSutra was founded in with the mission to educate the world about Bitcoin and Blockchain applications. What Does Volatility Mean?
Here is the definition of Volatility: It is a rate at which the price of a security increase or decreases for a given set of returns. Like this post? Harsh Agrawal.