Why Is Cryptocurrency Volatility A Defining Factor For Investors?

Knowing the Nature of Cryptocurrency Volatility

Volatility is a metric of the degree of fluctuation within the price of a financial instrument within a given period. For cryptocurrencies, volatility is being amplified by various factors such as relatively small market size compared to global financial markets, absence of centralized regulatory control, and prevalence of investor sentiment. Whereas equities and bonds are attached to the performance of underlying business or economic entities, cryptocurrencies are likely to discover their value in supply and demand forces, news cycles, and technological innovation.