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Evan
@evangower
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Why is cryptocurrencies so volatile? Crypto is a fairly new asset class that has rocketed to popularity is recent years from big name Bitcoin, Ethereum, Solana, and meme coins such as Dogecoin and Shiba. Some say its a new way to invest in gold in the new millennium as its can be a place to put money out of the stock market during a downtrend in stocks, but its cryptocurrencies have been know to be a very volatile asset. $BTC jumped to over 68,000 per coin in mid 2021 and has been spiraling down towards the low 40,000 at the start of this new year. You need to be watchful when your investing into the crypto space. Well, what affects crypto volatility you might be asking? Here are 3 key things that can affect the price of crypto. _________________ 1. Supply and Demand Supply and demand are the main effect to prices in crypto. The market value is primarily affected by how many coins are in circulation and how much people are willing to pay. Cryptocurrencies have limit to how many are available to use and the closer the amount is to the max limit, the higher the prices are likely to climb. __________________ 2. Investors Crypto is also driven by investors moves, whether its something buying a large amount of a particular coin, a famous person sending a tweet saying they support/disapprove of a coin and drives it higher or lower, or massive move by retail traders. Investors drive the emotions of cryptocurrencies __________________ 3. News and Social Media News and social media can help drive how crypto moves daily, with multiple predictions from “experts” being shared and articles post mentioning about the latest thing that crypto is adding to their circulation from their blockchain, to investors, or games etc., this can often lead to a hype to crypto prices. __________________ The main thing in cryptocurrencies is do your research on what your investing into, and to invest only the amount you want to risk. Don’t place all of your eggs in one basket, I see so many people saying that an particular coin (mainly Shiba or Dogecoin) will skyrocket so high and they’ll become super rich, but those can be much more volatile than there more bigger name coins. #cryptocurrencies #coins #bitcoin #ethereum #solana #shiba #dogecoin #investor #volatility #publiccommuity #2022 #blockchain This is not investment advice, please do your own through research before investing. This post is to showcase the risks when investing in cryptocurrencies as it is a very volatile asset. I am long $BTC $ETH & $SOL
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