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Instead of placing big bets on the volatile crypto market, it might be smarter to invest that cash in a few high-risk and high-reward plays in the tech sector instead.
For crypto investors who have been in the market a while, volatility is not a bug – it's a feature. Crypto Long & Short: Crypto Markets Are Volatile Because They’re Free Skip to main content
Cryptocurrency prices are much more volatile than established financial assets such as stocks. For example, over one week in May 2022, bitcoin lost 20% of its value and Ethereum lost 26%, while Solana and Cardano lost 41% and 35% respectively. The falls were attributed to warnings about inflation.
Stocks are often volatile, but they tend to be less volatile than crypto. Individual stocks are more volatile than a portfolio of stocks, which tends to benefit from diversification .
The first and most widely used decentralized ledger currency, [8] with the highest market capitalization as of 2018. [9] 2011 Litecoin: LTC, Ł Charlie Lee: Scrypt: C++ [10] PoW: One of the first cryptocurrencies to use scrypt as a hashing algorithm. 2011 Namecoin: NMC Vincent Durham [11] [12] SHA-256d: C++ [13] PoW: Also acts as an alternative ...
According to one 2022 analysis published in The Journal of Alternative Investments, bitcoin was less volatile than oil, silver, US Treasuries, and 190 stocks in the S&P 500 during and after the 2020 stock market crash. [153] The term hodl was created in December 2013 for holding bitcoin rather than selling it during periods of volatility. [154 ...
While stocks are known for their volatility, Bitcoin has shown off-the-charts price volatility over its history. That level of volatility means that Bitcoin ETF options are likely to be expensive. 2.
A higher volatility stock, with the same expected return of 7% but with annual volatility of 20%, would indicate returns from approximately negative 33% to positive 47% most of the time (19 times out of 20, or 95%). These estimates assume a normal distribution; in reality stock price movements are found to be leptokurtotic (fat-tailed).