Crypto’s Long Term Value Outweighs Price Volatility Concerns

in LeoFinance4 months ago (edited)

The level of understanding among crypto investors can vary widely. Sophisticated investors may see crypto’s infamous price volatility as an opportunity to generate profit or simply as teething issues which will resolve over time. Newcomers, however, may panic at sudden price drops and lose their nerve. In this article we look at the causes of crypto price volatility, plus how we can end the volatility forever. We’ll also explore the strengths of decentralised technology and why understanding them is a key advantage when thinking about and investing in crypto.

The price of Bitcoin, the first ever cryptocurrency, has gone from virtually zero at it’s inception up to an all time high (at the time of writing) of over $60,000 (USD) per whole Bitcoin.
Cryptocurrency Price Volatility means some wild spikes - as seen here in Bitcoin's price graph.

Source: Coin Market Cap

This has meant that early adopters who held onto their coins for several years became fabulously wealthy – while those who lost the keys to their coins by accident became fabulously angry! The news headlines have covered this obvious side of the crypto story repeatedly – but many commenters continue to lack a deep awareness of what crypto really is or why it is valuable beyond short term gains.

Perception Shapes Reality

Opponents of crypto often hone in on the volatility of crypto prices, suggesting that this makes crypto a dangerous or poor choice for investment. At the very least, the claim is that this volatility makes crypto impossible to use as an actual currency or store of wealth.

Definition: Price Volatility is a measure of the rate of change occurring in the price of something. We can say that a market is volatile if significant price changes occur at high speed.

The reality, however, is that all of the challenges that crypto faces have either already been overcome in some way or will naturally become less of a problem over time. Additionally, the relative disconnection of crypto markets from the prices of other classes of assets means that crypto assets are well positioned to survive global market shifts that catastrophically effect almost every other kind of investment. Crypto prices are driven by quite different factors to other types of investment, which can make crypto a paradoxically safe investment haven when used as part of a diversified investment portfolio.

Of course, it is also true that the computerised and thus highly mentally oriented nature of crypto can sometimes mean that prices rise and fall sharply in response to somewhat irrational thinking. This is somewhat due to the relatively low trading volumes that crypto experiences currently and is likely to change as more and more institutional investors buy into the larger crypto projects.

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I am agree with your statement that some critics of it is using the statistics or even they are manipulating with the volatility so that they can talk negatively about it.

As you have compared these with other investment alternatives of the market and we know in both cases there are some factors what is influencing the prices. But obvious there is a dramatic change sometimes but that doesn't mean that it cannot be stable if we can adopt it in a mass scale. As it is adopting by a few so it is possible with small volume to change the price dramatically but when it will be widely used that it is truly impossible to you have such kind of volatility. I have got some new points and I am thankful to you for sharing this article and you thought which is very much true about this matter.

You are welcome!

Perception Shapes Reality

I agree 100%! Our perception does indeed shape our reality.

I'm new to crypto but I have learned that the sharp rise and fall will probably change over time. I'm looking forward to reading this article you shared. thank you.

And is that you in the first picture hovering above the earth balancing on what looks like a tightrope?

Since you shared something for me to learn from and I love providing value, maybe you'd like the post @ryzeonline shared today about society preferring 'Dumb & Rich' to 'Wise & Poor?' if not all good.

I'm off to read this article you shared.

~love, Cyn

Hi, thanks for reading. No, that isn't me - I'm not one for the volatility of tight ropes over high heights - at least not physically ;)

Thanks for the link - we certainly do need more wisdom on Earth!

lol! I too would not be sitting up there looking all relaxed. I'm not a fan of heights. I thought it was impressive nonetheless.

and yes! we do need more wisdom here! I know that @ryzeonline is definitely working on that. 🙏❤️

Interesting discussion here, thanks for mentioning me. Perception shaping reality is an incredibly vital understanding, that appears to be gaining more traction recently. I absolutely love meeting anyone who is able to understand the concept and apply it well.

Props to both of you for drawing attention to this. 🙏

❤️❤️❤️

Hi, yes, absolutely - in essence, much of life is subjective and our own internal reality is reflected externally. It can be helpful to minimise all thinking and created perception in order to realise what is absolutely real/truth and what is mere projection!

Couldn't agree more. :) 🙏

Couldn't agree more.

The long-term impact of crypto is well understood by the early adopters, if not as practical and valuable technology then at least in the case of BitCoin, as a store of wealth as a hedge against inflation.

This is our generations version of the gold rush, and much like the gold rush, the weak hands will go home at the first sight of adversity while those who do their due diligence, invest properly, and hold long will continue to prosper.