Which cryptocurrencies are more susceptible to stock variance and why?

3 answers

• Dec 31, 2021 · 3 years ago
  Cryptocurrencies like Bitcoin and Ethereum are generally more susceptible to stock variance due to their high market capitalization and widespread adoption. The larger the market capitalization, the more likely it is for the price to be influenced by external factors such as news events, regulatory changes, or market sentiment. Additionally, the liquidity of these cryptocurrencies plays a role in their volatility. As they are more widely traded, even small changes in demand or supply can have a significant impact on their price. Therefore, it is important for investors to closely monitor these factors when considering investing in cryptocurrencies with high stock variance.
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• Dec 31, 2021 · 3 years ago
  In contrast, smaller cryptocurrencies with lower market capitalization and lower trading volumes are generally less susceptible to stock variance. These cryptocurrencies are often referred to as 'altcoins' and are considered riskier investments due to their lower liquidity and higher volatility. Their prices can be easily manipulated by market players with large holdings, leading to sudden price fluctuations. Investors should exercise caution when investing in these cryptocurrencies and conduct thorough research to understand the factors that may contribute to their stock variance.
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• Dec 31, 2021 · 3 years ago
  According to a recent analysis by BYDFi, cryptocurrencies with a strong focus on decentralized finance (DeFi) are more susceptible to stock variance. This is because the DeFi sector is still relatively new and rapidly evolving, with projects facing regulatory uncertainties and technological challenges. The success or failure of individual DeFi projects can have a significant impact on the price of their associated cryptocurrencies. Therefore, investors interested in cryptocurrencies with high stock variance may consider exploring the DeFi sector for potential investment opportunities.
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