World’s First Report on Crypto Volatility report published

The world’s first report on Crypto Volatility has been today been published, revealing the potential for volatility for the currencies with the largest market capitalisations.

The Crypto Volatility Report: September 2021 tracks the perceived relative volatility of cryptocurrencies with the highest market caps for September 2021.

It showed that some currencies appear relatively stable, while others seem to be orders of magnitude more volatile when trading liquidity and price swings over time are factored into the analysis.

Crypto volatility report findings

The analysis showed an extremely wide range of volatility levels for the most valuable currencies. At the high end of the scale, representing currencies with the lowest volatility scores, yearn.finance, Bitcoin and Ethereum came in with scores of .98. 1.09 and 1.83, respectively. These numbers on their own do not mean much, except when compared with more volatile currencies.

In contrast to the stable Bitcoin, with its score of 1.09, Ethereum, with a score of 1.83, appears to have nearly twice the potential volatility. Ethereum, Classic appears to have three and a half times the potential volatility of Bitcoin.

This may seem counterintuitive, as Bitcoin is subject to wide price swings on a regular basis. However, Bitcoin’s structure and characteristics in the market make these price swings far milder than might be possible with a currency that had less liquidity and volume.

The bottom of the score list is even more striking. While some of the scores here may be statistical outliers resulting from recent trading anomalies, they do suggest a far higher level of volatility than is occurring at the top of the list. TrueUSD, for example, with a volatility score of 8.25, appears to have the potential to be eight times more volatile than Bitcoin.

Implications and Recommendations

Cryptocurrency investors would be wise to consider volatility as a factor in their purchasing decisions. It is not enough to look at price variations in the last month or year to make a well-informed decision.

Rather, by considering a currency’s potential for volatility, an investor can protect him or herself from experiencing a massive, unexpected loss in value. At the same time, of course, volatility can reward the investor with a huge price surge. However, this is impossible to predict, and the risk of a fast downturn should be factored into the value analysis.

Source: http://fireworktoken.com