Why Bitcoin Price Varies Greatly with Other Cryptocurrencies
Many of us wonder why cryptocurrency prices hiked up and down so much, which results in crypto return differences. The crypto market is very volatile, and the returns are almost unpredictable. Nevertheless, it often yields a high return. More so, the market does not stay long in its declination state.
Cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin, Nano, and many others, are assets that often yield profitable income. Sometimes, investors get carried away with signals, without monitoring the market closely. The market is worth the risk since you get a large percentage of returns.
Nowadays, cryptocurrency is gaining more popularity than ever. Thanks to the world influencers involved in the crypto market. As a newbie or a Crypto Trader, you may wonder why there is so much difference in Crypto returns. Your observation is correct, while this post further explains the variance in crypto and especially on bitcoin price, and why it appears as such.
Cryptocurrency Returns Differences
Although cryptocurrency has different return percentages, it creates room for diversification. Since many assets exist in the crypto market, you can expect different return percentages from each of them. As such, no currency remains at the top for a very long time before another currency takes over.
The first step every potential investor take is to create an account on a legit crypto trading platform like Bitvavo. Since the market price fluctuates regularly, you can buy or sell your coin at favorable periods.
In the millennial age, many young investors invest broadly in cryptocurrencies and maximize their risk. However, many are aware of the great benefit attached to it and do not seem affected when the market drops because it often yields a greater return in the nearest future. This set of a generation never stick to a particular asset but distributes investments across digital currencies. This distribution is often unbalanced, and one would have more demand or supply than the other, as the case may be.
When you invest in stocks or bonds, you can estimate the expected returns on investment. Does this imply that cryptocurrency is a “play-the-luck” game? It is not. When you sign up at any crypto platform you can watch the market signal and identify the profit margin. Like many other investments, cryptocurrencies require intellectual monitoring and careful study. Although its level of volatility is high compare to others, and it is not a gamble nor a luck game as some think. When you know your onions, you are ready to satisfy your pocket.
You can get a practical understanding of crypto return differences by signing up for a free trading experience and identify the right strategies.
Factors Influencing Bitcoin Prices Variations
Bitcoin is unlike bonds or treasury bills, where the government is in charge of inflation rates and monetary policy. Hence, you can expect volatility in prices, which result due to the following factors:
- Bitcoin market supply rate and the amount of demand it receives
When coins supply reduces with time, and there is a high demand for coins, it would cause a hike in price. Also, the degree of supply depends on the maximum amount of Bitcoin the system can run on existence.
- The degree of competing cryptocurrencies influences an asset return stability
Bitcoin is the most popular asset of cryptocurrencies among other competitors like Ethereum, Binance, Cardano, and many others, while profiting most investors. An increased competitive market reduces the high price of a coin, which in turn pronounces Bitcoin visibility.
- Market trading exchange
Here is another reason why cryptocurrencies in general and bitcoin price varies so much. When the market trading exchange is more popular, it creates more attention to cryptocurrencies. Hence, demands become higher. Likewise, when the market trading exchange is less popular, it decreases crypto demand.
- New or established regulations on cryptocurrency sales
- Cryptocurrencies ownership is individual-based and not subject to a company or country economic growth
Wrapping up, we recommend investors request the service of a professional before getting into the crypto game. Make sure you are not isolated but consciously learning from a mentor or a “crypto idol”. In other words, your trainer should be proficient and highly knowledgeable about the market operations. Likewise, it will prevent you from falling into online trading scams. Carry out proper research and confirm you are registering on a reputable cryptocurrency trading platform. The world economy is not designed for particular people or social class. You can own it as well.