What makes cryptocurrency volatile?

[Starmix]

Several factors contribute to the volatility of crypto. I am sure that many of you here are crypto investors and much knowledgeable of the reasons why crypto is volatile.

The reasons may include supply and demand, fluctuating demand, regulatory and legal factors, market maturity and liquidity, technology and society, or macroeconomic factors.

Lastly, the factors mentioned above can interact in complex ways, making it difficult to predict crypto prices with certainty.

What can you add based on your experience as a crypto investor?

 

[Augusta]

It's due to liquidity (supply and demand), regulation, and crypto being predominantly sentiment driven.

 

[gwolf666]

From my experience as a cryptocurrency investor, I can say that volatility is one of the most inherent characteristics of this market, and that can be both an advantage and a disadvantage. In addition to the factors you mentioned, I believe the influence of global news and events plays a very important role. A political announcement, a new regulation, or even a tweet from a public figure can cause prices to move quickly and often unpredictably. I've also noticed that the lack of clear regulation in many countries creates uncertainty, which increases volatility. The technology and mass adoption are still developing, so any technical change or shift in perceived security can significantly impact the market. In short, in this world, patience and constant research are key, as the nature of cryptocurrencies will always be volatile, but also full of opportunities if managed well.

 

[Starmix]

It's due to liquidity (supply and demand), regulation, and crypto being predominantly sentiment driven.

That is right, mate, and I only invest a very small amount in crypto. I am still studying and learning about it. It will be painful if we lose.