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Volatility in cryptocurrency markets – Bitcoin Volatility

Bitcoin Volatility
Bitcoin Volatility

Cryptocurrency Markets


JANUARY 15, 2020 / 14:50 UTC

LONDON (Fintech Zoom) – Bitcoin Volatility 

All cryptocurrencies combined are currently worth a little under $150 Billion. When comparing that figure to the $8 Trillion Gold market, or the $40 Trillion US Equities market, that is still incredibly small. The minuscule size of the crypto market combined with the fact that most cryptocurrencies are still only thinly traded on small exchanges (akin to penny stocks), makes them highly volatile, with the price of many coins often swinging
over 10% per day.

Needless to say, this brutal volatility makes them a highly unpractical medium of exchange. Cryptocurrencies are mostly used today by speculators as a Store of Value, betting that their price will go up (especially in the case of Bitcoin). The thesis of most crypto investors is that, over time, an increasing number of speculators will decide to store a small portion of their wealth in cryptocurrencies.

As a consequence, the total market capitalization of all cryptocurrencies would increase significantly, to the point where it becomes a highly liquid multi-trillion market, similar to Gold, where big price fluctuations are not possible anymore, and where cryptocurrencies would be a viable currency for the world’s economy.

 

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Pascal Thellmann

Pascal Thellmann is an investor and marketer focused on the intersection of cryptocurrency and the legacy financial system. He co-founded Bounty0x, which at the time was the largest crypto freelance platform. Now Pascal dedicates his time to CoinDiligent and trading.

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