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14566699 No.14566699 [Reply] [Original]

what is it about cryptos that cause the extreme volatility that no other security has?

>> No.14566728

Low liquidity.

>> No.14566754

>>14566699
low liquidity + super speculation

>> No.14566802

>>14566728
They have better liquidity than plenty of shit. Look at a mini bond
>>14566699
I don't feel super confident in saying it, but basically I'd say the core characteristic that makes it so volatile is the total lack of structure, no earnings reports, no regulation, no actual consensus on expectations. You're mostly investing abstractly

>> No.14566820

>>14566802
Meant to say muni

>> No.14566825
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14566825

>>14566699
100x leverage degenerate gambling retail traders + low supply

>> No.14566849

>>14566699
Thin books

>> No.14566904

>>14566728
>>14566754
btc isnt abnormally illiquid compared to other investments; transaction costs are in the cents and can be done instantly on any number of major exchanges

>> No.14566953

So far not a single person has given a good answer. I have been getting people to invest in bitcoin for years and this constantly comes up. The truth is traditional investments like stocks and bonds are only more stable for two reasons. Low liquidity and FDIC insurance of investment banks. Because of goverment insurance of financial institutions it discourages quick panic fueled turn arounds in the market. I.e. a bank run. Bitcoin and other cryptos simply have a much more dynamic price that more truly measures their value in the eyes of the consumer. Sorry if there any mistakes in this. I am writing this from my phone while in class.

>> No.14567002

>>14566953
Please let me know if that makes sense. I would like to know what you biztards think

>> No.14567049

>>14566953
>Bitcoin and other cryptos simply have a much more dynamic price that more truly measures their value in the eyes of the consumer.

truth in here. btc captures the emotions of the investor more heavily

>> No.14567100

>>14566699
unregulated markets = constant price manipulation & frequent PNDs

>> No.14567134
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14567134

Wanna price stocks use discounted cash flows
Bonds are easy too

Price crypto... we just don't know. There's no model. It's based on what people think and how they accept it. It's a currency so network effects are important (merchant count etc). It's being use as SoV too so gold market cap etc is important.