Crypto Currencies Volatility, a Profitable Rollercoaster

This year we are able to observe that cryptocurrencies tend to maneuver up and down even by 15% of value on a regular basis. Such changes of price are referred to as a volatility. But what if this is totally normal and sudden changes are one of the characteristics of the cryptocurrencies allowing you to make a good profits?

To begin with, the cryptocurrencies caused it to be to the mainstream very recently, therefore all the news headlines regarding them and rumors are hot.After each and every statement of government officials about possibly regulating or banning the cryptocurrency market we observe huge price movements.

Secondly the type of cryptocurrencies is more such as a store of value - many investors consider these as backup investment option to stocks, Bitcoinvest, physical assets like gold and fiat (traditional) currencies. The speed of transfer has as well an influence upon volatility of the cryptocurrency. With the fastest ones, the transfer takes even just handful of seconds (up to a minute), what makes them excellent asset for brief term trading, if currently there is no good trend on other kinds of assets.

What everyone should bear in mind - which speed goes as well for the lifespan trends on crypto currencies. While on regular markets trends might last months as well as years - here it happens within seven days or hours.

This leads us to another location point - although we are speaking of a market worth a huge selection of billions of US dollars, it is still tiny amount in comparison with daily trading volume comparing to traditional currency market or stocks. Therefore an individual investor making 100 million transaction on stock market will not cause huge price change, but on scale of crypto currency market this can be a significant and noticeable transaction.

As crypto currencies are digital assets, they are susceptible to technical and software updates of cryptocurrencies features or expanding block chain collaboration, which can make it more attractive to the potential investors.

These elements combined are reasons why we are observing such huge price changes in price of cryptocurrencies within handful of hours, days, weeks etc.

But answering the question from the first paragraph - one of the classic rules of trading is to buy cheap, sell high - therefore having short but strong trends each day (instead of way weaker ones lasting weeks or months like on stocks) gives a lot more chances to make a decent profit if used properly.