cryptocoingossip

Predicting the crypto market is tough. Unlike the stock market, where you can whip out some technical analysis to get a sense of things, the crypto market is like the Wild West of trading.

Most of the time the stock market was chill as a cucumber. But in crypto land? It’s a rollercoaster ride, my friend. Even big shots like Warren Buffett aren’t too keen on diving into the crypto world.

So, why all the ups and downs? Let’s break it down.

1. Small Market.

Picture this: the stock market’s a massive ocean, while the crypto market’s more like a backyard kiddie pool. Trillions slosh around in stocks every day, but in crypto? We’re talking mere millions.

With such a teensy market, even the tiniest ripple can send prices spiraling.

2. No Central Authority.

When it comes to crypto, you’re the captain of your own ship. No banks or governments calling the shots here. It’s all about trust between buyers and sellers.

But in stocks? Company performance, future plans, and their track record so far considered and the central authorities like the SEC control the market.

3. No Intrinsic Value.

The stock market price is calculated based on company performance, but cryptocurrencies don’t sell a product, earn revenue, or employ thousands of people.

Companies work every day to make better products or services and offer dividends to attract more investors. On the other hand, just a tiny amount of the total value of the currency goes to miners to evolve it. Because of this, it is hard to value.

How do we know if it is overbought or oversold? When is it a good value or overpriced?

Without any fundamentals to base this information off of, we can only rely on market sentiment, often dictated by the media that makes money on viewership.

4. Fake NEWS.

Crypto investors are mainly relying on NEWS media for a better understanding of market situations, crypto NEWS is the only way to predict currency performance and also inform what is happening in the crypto community.

Fake NEWS spread to create panic in the market and spread FOMO and FUD in crypto holders, this panic selling or buying situations create more fluctuations.

5. Fixed Supply.

Ever heard of scarcity driving up prices? That’s the deal with top cryptos like Bitcoin can exist and only 101 million Ethereum are available, top cryptocurrencies are limitedly available which is also a good thing and at the same time bad because of the limited supply future value of currencies can go high but on the same time it can create a monopoly and it became hard to mine currencies.

Only a few people control the market not a good situation and also not good for trading.

6. Differences In Price.

Top fiat currencies do not have a huge price difference, like Doller and Pound or Doller and Euro,.Their prices don’t swing like a pendulum, making them super smooth for traders.

But in the crypto realm? It’s a whole different story. Bitcoin’s riding high while other cryptos are still in the hundred-dollar club. This rollercoaster of prices makes it tough for traders to find their groove, especially when the market’s still finding its feet.

7. Manipulations.

Ever heard of market manipulation? It’s like pulling strings behind the scenes, and the crypto world isn’t immune. With more central exchanges than decentralized ones, and whales splashing cash left and right, the stage is set for some serious price-wrangling.

Newbies? They can’t understand what is going on in the market. Easy targets for those looking to make a quick buck by playing the market.

If you run a centralized exchange then you have an opportunity to manipulate prices even in a regulated environment. That’s a very very tempting position for somebody who’s running a centralized exchange.

8. Lack of Security Measures.

a leaky ship in a stormy sea. That’s what some crypto exchanges feel like when it comes to security. With hacking news popping up left and right, it’s no wonder folks are getting nervous.

That’s why the best way to store your crypto is to use cold wallets like Ledger Nano

But some exchanges? They’re like a house of cards waiting to tumble. When they can’t handle the load, it’s crash city. And trust me, that’s the last thing affecting the market badly.

9. Non-Wide Spread Adoption.

Crypto’s still the new kid on the block, many nations, and banks still do not recommend using crypto transactions. With banks and nations giving it the cold shoulder, it’s no wonder some folks are feeling fear about diving in.

In the eyes of many people, cryptocurrencies are used on the dark web to support illegal activities, if you invest your money in crypto you lose all your money overnight. These kinds of thoughts make people fear to invest in crypto.

10. Short-Term Investors.

Fast cash, quick returns – that’s the name of the game for some crypto investors. Long-term goals? Who needs ’em when you can ride the price rollercoaster all day long?

But here’s the thing: constant buying and selling? It’s like throwing a wrench in the market’s gears. Up, down, sideways – it’s chaos, pure and simple.

These are some reasons why a crypto market is volatile, the main motive of cryptocurrencies is acting as a currency, not as a market share.

Cryptocurrencies are here to make our daily lives easy but now we are all using them as shares, cryptocurrencies can be good investments if held for a long time with the right knowledge.