Every new and seasoned crypto investor has the same question in their minds: Is crypto volatility good for my money or not?

While there are many reasons behind the fluctuating nature of cryptocurrency, it may or not affect a trader or investor’s decision. In 2018, for example, Bitcoin took a major plunge and bounced back in 2020. Different experts pose different POVs regarding this variable state, but people who want to get started with binance have to understand its implication.

Hence, we’ve brought you a very detailed and informative blog that will uncover the facts about crypto industry market volatility and its impact on your investment decisions.

Reasons for Crypto’s Volatility

Before deciding whether or not crypto volatility is good for investors, let’s look at the main reasons behind variability.

1.    Crypto Industry is Still Emerging

Studies show that crypto is still emerging, and only 1 in every 10 people are showing interest in crypto investments. This means there’s a long way to go before binance and blockfi become a part of our daily lives. Cryptocurrency is a highly emerging market, and fueling it requires market and price fluctuations.

While the market is still insignificant compared to the traditional stock and gold markets, it has the ability to influence investment values.

2.    Developing Technology

It has only been one decade since Bitcoin dropped into the market, but it truly has been a roller coaster ride since then. Scalability, accountability, and regulatory policies are three main factors that require strengthening to make crypto more stable. Due to this problem, non-validated contracts often get rejected or delayed, which creates a sudden bull or bear in the market.

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Is Volatility Good or Bad?

Crypto volatility is a complex concept, and many beginners fail to realize its importance when starting out in the cryptospace. Whether you’re an investor or a trader, you have to make sure that you’re financially risk-tolerant and able to handle sudden market crashes.

Since the crypto market is dominated by 70% of investors and traders, their ability to bear volatility heavily depends on their financial elasticity. Identifying the right ICOs, prices, and currencies, and trading at the right time is crucial to stay afloat.

In addition, over 60% of crypto traders are aged between 18 and 35, and this group is extremely fragile because they keep on making withdrawing the currency. As a result, the market becomes more prone to volatility.

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