Volatility is one of the major issues associated with the crypto world since the beginning. The market is too risky. Significant jumps and falls are seen in a matter of minutes. One moment the market is shooting up with everyone buying and the very next moment, it is down in dirt resulting in the loss of a large amount of money for various people. Crypto trading as a result of this volatility does not become a very ‘natural’ option to go with from an investment point of view. But then again, this volatility is the reason that makes crypto trading valuable as people step in this world in order to gain a quick buck. So whether volatility is good for crypto trading or not?
Owing to the volatility associated with bitcoin and other cryptos, the image of this world is not pretty in the eyes of the general media. Extreme price jumps and falls make one question the credibility of these assets. With credibility in question, people hold back from entering this world. Here volatility proves to be bad.
On the other end, the bull run of 2017 is in front of everyone as bitcoin rose from a couple thousand to almost $20,000 in December. Although this rise soon finished, people who cashed out on the right time gained an enormous profit. Here, volatility proved to be good. Since then, the market is in a bear run. People have bought bitcoins over the past months with the hopes that its price will go up again. But in this quest, the results have largely been lossy. Price isn’t going up as bitcoin is floating around in the $3,000. Even now nobody knows if it has hit the bottom or not. It might head down even further. With so much volatility, nobody knows for sure what is expected to happen next.
Volatility is also one of the reasons why an exchange-traded fund (ETF) has not been approved by the regulatory body in charge of the situation, the United States Securities and Exchange Commission (SEC). People hold back from entering the arena of crypto trading owing to this major issue. So it seems only natural that if this world is to grow and mature, something needs to be done regarding the issue of volatility. Crypto trading is seemingly becoming unattractive for many owing to this major issue some might say.